Business Hijacking

[Dave A]

Now, what cost-effective remedies does South African Law allow the hijack victim to pursue, in terms of going on the attack?

You can try laying a charge with the S.A.P. commercial crimes unit. (Don't waste your time going to local policing).

[desA]

Thanks, Dave. Yes, indeed. Excellent point. I'm very glad you brought this up.

The pathway into SAPS today, is very tortuous. Can you imagine having to deal with around 120 new cases, per officer, per month? Practically, these poor officials are completely overwhelmed. The Commercial Crimes Unit will try every trick in the book, to ensure that they deflect as much of the incoming away, as possible. Actually, I don't blame them. They are generally really nice folks - very willing to help.

A point to be careful of. If the case is first lodged at a local police station, the Station Commander will typically review each case in the evening of when it was lodged. If it looks so be either too difficult, or there is not sufficient interest - it will be binned, without entering the system.

A few rays of light begin to appear. I outline below a strategy to move such a matter into SAPS:
1. Visit the local SAPS office, in which jurisdiction the case falls. Very important to get it right. Chat to them.
2. Use the services of a competent attorney - it helps to have one who used to work for the Commercial Crimes Unit.
2.1 Request budget for attorney's time on this part - only.
2.2 Work with attorney on a well-set case.
2.3 Let him/her assist to write a comprehensive Statement - outlining all relevant facts, together with supporting paperwork, weaving together a comprehensive story of what has happened to you. All relevant participants in the fraud need to be mentioned, together with their specific roles.
2.4 Attorney can assist to determine the correct value of the prejudice - in a fraud case.
2.5 Fraud definition:
2.5.1 Intent + Misrepresentation + Prejudice = Fraud
2.5.2 All three elements have to be in play, to be classified as fraud.
2.5.3 Write up statement, on SAPS format & complainant to swear contents are true - before Commissioner of Oaths & sign statement.
2.6 Attorney can advise suitably-qualified person - generally ex officer of Commercial Crimes Unit - the 'Consultant'.
2.7 This Consultant will then investigate which part of SAPS to lodge the case & lobby/inform/discuss its suitability to go to trial.
2.7.1 Sometimes, this requires additional information to be provided to the investigating team.
2.8 Case then lodged with SAPS.
2.8.1 SAPS will send a mobile SMS with Case Number, followed by another SMS with name of investigating officer.
2.9 At this point, the case is lodged within the SAPS system.

A further ray of sunlight:
If an attorney coaches a client to commit fraud & knowingly assists in this - they are also committing fraud. They can then become part of the SAPS investigation. They have no immunity!

It is a sad fact, that, a number of attorneys - officers of the court - specialise in the grey areas at the edges of the law. In some cases they are experts in acting outside the legal framework. The Legal Profession takes a dim view of this behaviour.

[wynn]

If the assets have been stripped chances are that the cc is insolvent, it seems you are going to loose anyway so just apply for liquidation.
If they did strip the assets in a certain time frame the liquidators will demand the assets be returned, then you get your portion after costs and they get only what they were entitled to less costs after the liquidation.

KISS (Keep it simple) and forget their bulldog attorney, let him fight with the liquidator, fat chance he'll get anywhere! he will probably bail as soon as it goes to liquidation.

End result, you may get less than you are entitled to but that will probably be more than you will get if you fight this in court, on the other hand the others will also get less which will hurt like a vice on their nuts.

[desA]

Thanks Wynn. Remember, we have here a common man, with light wallet.

In order to bring a liquidation request to the court, you can expect to pay a minimum of R60k, just to get the order in place - if un-apposed. Thereafter, there are a number of steps that need to be executed by the court-appointed liquidator, before asset recovery can even begin. By the time the enquiry has been sorted out, etc, etc - you'd be looking at over R100k. The initial deposit would be towards R30k.

The first question the potential liquidator will ask - "How much money do you have?".

Remember, if the business assets have been stripped, the fees & costs will have to be carried by the common man, with light wallet!

Hijacker's Principle #5
Oppose, obfuscate, frustrate, bully, blow-smoke, keep your head down, isolate & marginalise the hijacking victim. A willing attorney specialising in hijacking, will gladly do as bidden by the hijackers.


In SA, we have lots & lots of theory. In practice the law is generally utterly porous & rather impractical for SA's citizens. The whole system is clumsy & was written for a time when the common man was overly flush, I'd imagine.

[ians]

Lesson learnt from this?

Don't trust anyone.
Don't get involved in a partnership unless you are the majority shareholder and control the finances.
Don't go to court unless you have too much money.

[desA]

Very much agreed, Ians.

One has to wonder how CIPC governance could be improved.

I was in Sweden last November with specific intent to invite a large high-tech company to build manufacturing capacity in SA. In the end, good conscience would not let me invite them into the present legal quagmire in SA. At this point, I basically treat SA like the rest of 'darkest Africa'. Fear what you cannot control. Only import items, as required. Local expertise for repairs only.

[wynn]

Thanks Wynn. Remember, we have here a common man, with light wallet.

In order to bring a liquidation request to the court, you can expect to pay a minimum of R60k, just to get the order in place - if un-apposed. Thereafter, there are a number of steps that need to be executed by the court-appointed liquidator, before asset recovery can even begin. By the time the enquiry has been sorted out, etc, etc - you'd be looking at over R100k. The initial deposit would be towards R30k.

The first question the potential liquidator will ask - "How much money do you have?".

Remember, if the business assets have been stripped, the fees & costs will have to be carried by the common man, with light wallet!

Hijacker's Principle #5
Oppose, obfuscate, frustrate, bully, blow-smoke, keep your head down, isolate & marginalise the hijacking victim. A willing attorney specialising in hijacking, will gladly do as bidden by the hijackers.


In SA, we have lots & lots of theory. In practice the law is generally utterly porous & rather impractical for SA's citizens. The whole system is clumsy & was written for a time when the common man was overly flush, I'd imagine.

Surely that is if you wish to actually liquidate them, I don't believe it costs too much to actually place them in recievership, naming all the assets stripped, which means nobody can do diddly squat with the cc or its assets until somebody blinks, (fraud if they do and then you can go for them criminally) unfortunately yourself included, so all their shenanigans come to a dead stop, which will give you the wiggle room to resign and not be responsible for any further debt. or to negotiate your share out of the cc before you rescind the recievership.

[CLIVE-TRIANGLE]

There are a number of alternative and free routes also.

The first is to a lay a complaint with the CIPC. They actually do react.
The second, if there is tax fraud, is to make a full disclosure at SARS, There too they do actually do something.

This is the course of action at CIPC:
Complaints to address alleged contravention of the Companies Act

A complaint relating to an alleged contravention of the Companies Act may be reported to CIPC by completing a form CoR135.1, and sending it to the following e-mail address: CoR135.1complaint@cipc.co.za.

Complaints relating to companies or close corporations that is carrying on business, where a person has acted inconsistent with the 2008 Act and a person’s rights under the 2008 Act, Memorandum of Incorporation (MOI) or rules have been infringed, or there is an intend to defraud or carry on its business recklessly, and with gross negligence, or for any fraudulent purposes, may be reported in terms of the new Companies Act No 71 of 2008, to the Companies and Intellectual Property Commission (CIPC).

If the CIPC has reasonable grounds to believe that a company is engaging in conduct prohibited by the Act, the Commission may issue a notice to the company to show cause why the company should be permitted to continue carrying on its business, or to trade, as the case may be.

Please note that upon receiving a complaint, the Commission may resolve:

not to investigate, to refer it, if more practicable, to the Companies Tribunal or Accredited agency or to direct an investigator or inspector to investigate.
Please ensure that you substantiate the facts being alleged as far as possible. Note that if the allegations, when proven, would not constitute grounds for remedy under the Companies Act 2008 (Act 71 of 2008), it would not be investigated.

Complete the relevant form CoR135.1 (Complaint) and e-mail the form and all substantiating documentation to CoR135.1complaint@cipc.co.za.

If you require any other assistance contact the Complaints and Investigation Department at telephone number 012 3941511/1611.

[CLIVE-TRIANGLE]

The references to the companies act are equally applicable to cc's, by the way.

Even a cc's refusal to process a member's resignation and thereby continuing his exposure to risk, is grounds for a complaint. Evidence of YOUR actions is of course key! You cannot not resign, because of your belief that they won't process it. Resign in writing and get proof of delivery and even complete the resignation section of a Ck2 form.

[desA]

Hi Clive,

Thank you so much for such incredibly useful information. It is very much appreciated.