Presented by South Africa

1. COMPANIES AND INTELLECTUAL
PROPERTY COMMISSION (“CIPC”)
CORPORATE GOVERNANCE SURVEILLANCE AND
ENFORCMENT UNIT

2. ESTABLISHMENT OF THE CIPC
Section 185 of the South African Companies Act No 71
of 2008 (as amended) established the Companies and
Intellectual Property Commission and laid the basis
for the CIPC becoming a Regulator.
This entailed a mind shift from being a Registrar as
the CIPC’s predecessor the Companies and
Intellectual Property Registration Office was known,
to a Regulator with increased scope and powers.

3. CRITICAL FEATURES OF THE ACT
There are two critical features in the Act that
characterise the CIPC as a Regulator with
heightened compliance powers:
(1). Its ability to monitor proper compliance (s.
187(2) b).
(2). The issuing and enforcing of Compliance
Notice (s.187(2)(g).

4. Section 187(2) (b) is an important element in fostering
compliance with the Companies Act.
If used effectively we are of the view that it can lead to
the change in the conduct of participants for the
better.
CRITICAL FEATURES OF THE ACT

5. EXAMPLES OF COMPLIANCE NOTICES
TELKOM, a large state owned telecommunications company
that is listed on the Johannesburg Stock Exchange and
specifically its Ceo was recipient of a compliance notice for
breaching section 44 & 45 of the Act on 10 February 2014.
The previous Chairperson of the South African Airways
(“SAA”), a state owned airline was the recipient of a
compliance notice Issued to its Chairperson. The Chairperson
failed to comply with Sections 73 (7) and 73 (8) of the Act and
acted in a manner materially inconsistent with the duties of a
director thus breaching Section 76 (3) of the Act , when as a
director and the Chairperson of the Board of SAA she
misrepresented a Board decision to the Minister.

6. EXAMPLES OF COMPLIANCE NOTICES
The Board of Directors of Steinhoff a (not) so large
South African furniture retailer listed on the JSE and
Frankfurt Stock Exchange was also the recipient of a
compliance notice.
The restatement of the 2016 consolidated financial
statements of Steinhoff and the restatement of the
2016 and 2015 financial statements of Steinhoff
Investment Holdings Ltd (Reg. No. 1954/001893/06)
leads the CIPC to conclude that Steinhoff is
implicated in contravening section 214 (1) (a) of the
Act.

7. END
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