CIPC orders Nova to stop selling properties

18 August 2022
Accounting
South African Accounting Academy

The order to cease selling assets is the first active step a South African regulatory authority has taken against Nova – the company which took ownership of all the former Sharemax properties and was tasked to repay the R4.6 billion around 18 600 people invested in Sharemax.

It is the third compliance notice the CIPC has issued to Nova since early last year and it effectively restricts the board’s authority to manage the company at its discretion.

Moneyweb can also confirm that the CIPC is driving an inter-regulatory process to re-evaluate the events that led up to Sharemax’s implosion and Nova’s failure to execute the rescue plan. This process involves the South African Reserve Bank, The Hawks, and financial regulators such as the Financial Intelligence Centre and the Financial Sector Conduct Authority (FSCA).

It is not clear how advanced this process is, but it currently involves sourcing documents and affidavits.

Moneyweb has also been informed that this process could lead to new criminal charges.

Click here to access the article:

https://www.moneyweb.co.za/in-depth/investigations/breaking-cipc-orders-nova-to-stop-selling-properties/?mc_cid=e6b3e828b4&mc_eid=e2d8da78aa

Relevance to Auditors, Independent Reviewers & Accountants:

ACT is yet another piece of legislation that your clients must comply with, and which you must assess compliance with. If they don’t comply with the relevant laws and regulations, you have certain reporting obligations in terms of NOCLAR (NOn-Compliance with Laws And Regulations) – this could include reporting to management, qualifying your audit opinion, reporting a Reportable Irregularity, etc.
Compliance orders issued by CIPC as the regulatory body, should be adhered to, otherwise the entity and/or the directors/members may be held liable.
As an auditor, independent reviewer, accountant or tax practitioner, you need to consider information from media articles.

Relevance to Your clients:

An entity (company or close corporation) has a duty to comply with the Companies Act, and directors have to fulfil their duties accordingly.
Compliance orders issued by CIPC as the regulatory body, should be adhered to, otherwise the entity and/or the directors/members may be held liable.

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