Toward the end of 2024, the employment contracts of five CIPA directors, all members of the Executive Committee, were nearing expiration. These directors had reportedly clashed with the Caretaker Registrar General (CRG), Joel Duke Ramaphoi, over operational decisions. Ultimately, only three directors had their contracts renewed. The IT Director, Greene Kamakama, resigned before a decision was made regarding his contract, though The Business Weekly & Review has learned that the CRG was reluctant to renew it. Similarly, the contract of the Director of Compliance Awareness and Client Services (CACS) was not renewed.
An independent investigation by The Business Weekly & Review revealed concerns about renewing these contracts, stemming from issues identified in past and current audits by the Internal Audit Department (IAD), the Auditor General (AG), and SIL Consultant. Among the key issues was the alleged concealment of information to the Board, violating corporate governance principles, internal policies, processes, and CIPAโs Code of Conduct. The Auditor Generalโs Shared Audit Findings particularly highlighted the need for a thorough investigation into the officersโ professional conduct under Section 26(4) of the CIPA Act.
The new CIPA leadership intends to restructure the organisation to enhance efficiency and effectiveness. Management believes that since IT is primarily a support function, it does not necessarily require a director-level leader, especially as most key IT systems are outsourced at a high cost. These systems include the Online Business Registration System (OBRS), IPAS (intellectual property administration system), Data Extraction Platform (Selling of Business Data), Teammate (Audit and Risk Assessment System) system, servers, and others. CIPA spends approximately P9 million annually on IT systems, with costs rising each year. Under the previous IT Director, ongoing issues related to IT governance, risk, and internal controls highlighted the need for new leadership to better align IT strategy with CIPAโs overall direction, according to information sourced by this publication.
The Business Weekly & Review found that no performance appraisals were conducted for the former IT Director or the entire organisation over the past two years. It emerges that this lapse was primarily due to poor project management of the Performance Management System (PMS), an IT system implemented at a cost of P1.8 million. Despite this, it is said management could have opted to manage performance manually. Under Kamakamaโs leadership, the IT Department reportedly withheld information, undermining IT governance, risk, and compliance.
There is still lack of clarity surrounding the OBRS project, particularly whether it is an upgrade or a new system. Documents seen by The Business Weekly & Review indicate that there is no signed Statement of Works (SOW) outlining the deliverables expected from Foster Moore as part of the zero-cost upgrade. This has led to confusion regarding the projectโs scope. Additionally, USD 240,000 (P3.3 million) was paid after the SOW and construction process were completed, even though progress updates remain unclear. Despite multiple requests, the SOW has yet to be provided following Foster Mooreโs recent visit to Botswana. The lack of a detailed SOW has caused equivocation regarding the upgrade deliverables, resulting in delays and multiple extensions of the go-live date.
CIPA and Foster Moore are said to have agreed to extend the legacy contract under the same terms and conditions until the upgrade is complete. A bill of USD26,342.26 (P364,000) is said to have been submitted to Finance for retroactive approval. However, supporting documents indicate that the AWS Hosting cost relates to the BO register, which should only be paid upon project completion.
Regarding the Beneficial Ownership (BO) system, payments were allegedly made without the CRGโs knowledge. The inception process was fully paid for, amounting to USD100,000 (over P1.3 million), split into two tranches: USD65,000 (over P897,000) and USD35,000 (over P483,000). The CRG was apparently aware of only the USD65,000 payment. Additionally, USD100,000 (P1.3 million) was paid for the completion of the BO registerโs construction and testing process, also without the CRGโs knowledge. It remains unclear if the BO register is fully operational and tested.
CIPA agreed to pay USD2,000 (over P27,000) monthly for the development and User Acceptance Testing (UAT) of the BO register, covering February and March 2024. However, obtaining confirmation of service delivery and an extract of the register remains a challenge.
Under Sections 21 and 345 of the Companies (Amendment) Act 2018 and the Financial Intelligence Agency (FIA) Act, companies registering with CIPA must provide beneficial ownership information. This legislation mandates CIPA to establish and maintain a register of beneficial ownership, identifying individuals who benefit from or control a company without being officially listed as owners. Such a registry is essential for enhancing corporate transparency, curbing corruption, and preventing money laundering and terrorism financing.
When contacted, Kamakama said he is constrained comment on CIPA matters since he is no longer an employee.ย
The former IT Director was reportedly close to Ntesang Sebetso, the former Director of CACS, whose contract was not renewed upon expiry in November 2024. Like the former IT Director, no performance appraisal was conducted for her over the past two years. Internal and external audit findings, along with preliminary results from the Auditor Generalโs independent audit, indicate that the CACS Department also withheld information from the CRGโs office, compromising governance, risk, and internal controls. Sebetso was allegedly the common approver of payments, including the USD 100,000 for the BO register, which remains unverified.
The OBRS Application controls under CACS were found to be inadequate, resulting in significant financial irregularities, allegedly. This issue stems from the overlap of functions within CIPAโs current structure, as CACS staff should not be involved in such matters. According to sources, the CACS Departmentโs overlapping functions have historically caused cross-functional rivalry and ambivalence regarding decision-making authority, particularly in areas like awareness and outreach and staff-facilitated customer applications. Other Executive Committee members expressed concerns that the CACS Department operated in silos, limiting the effectiveness of the three core officesโCBN, IP, and Copyrights. It is said that a pulse survey revealed that staff from these core offices feared victimisation and perceived the CACS Director (former) as โuntouchable.โ
Annual returns, which constitute 60 percent of CIPAโs revenue, are a common target for fraud. Due to weaknesses in OBRS functionality, CACS staff can file restoration applications on behalf of customers through a back-end process, creating opportunities for collusion with customers or agents to bypass penalties, thus undermining revenue collection. Similar fraudulent practices were allegedly employed during the transition from manual processes to CBNAS. A secret โbacklogโ link allowed supervisors with access rights to overwrite arrears on annual returns.
The Directorate of Intelligence Services (DIS) is investigating cases where companies changed directors without the consent of other directors. DIS found that company secretaries colluded with CIPA employees to facilitate these unlawful changes. One company secretary of interest is linked to almost 60 companies with altered directorships. Alarmingly, the names of some CACS staff members have been implicated, as they have system rights to manage directorship changes.
