Politics, Policies & Protests Plague The CIPC

In an interesting turn of events that has caused much speculation amongst the public, Astrid Ludin, the Commissioner of the Companies and Intellectual Property Commission (CIPC), is the latest senior public service sector head that has recently been targeted for suspension.

The Business Day reported that Ms. Ludin, who has served as the CIPC watchdog since 2011, had received a suspension notice over allegations related to procurement of services and payment of salaries in contravention of the Public Finance Management Act after a forensic report was conducted by Gobodo Forensics and Investigative Accounting (the Gobodo report). The Gobodo report found that Ms. Ludin had irregularly appointed accounting firms HT & Co and Calculus without following proper procedures. Other alleged irregularities related to her approval of a R25,000 scholarship for an employee, appointment of maintenance and contract workers, an information technology contract and salary adjustments for staff.

At the time of receiving the suspension notice, Ms. Ludin stated: “My understanding is that the minister will apply his mind before deciding on a suspension. There are no grounds for my suspension in my view and I am sure the minister and his legal advisers will come to a similar conclusion”.

Mr October, the Director General of the DTI explained that the findings of the Gobodo report did not relate to matters of corruption or personal gain by Ms. Ludin but to compliance with technical procedures and processes. Mr. October added that Ms. Ludin had done “an excellent job” in turning around the CIPC. Indeed, under Ms. Ludin’s supervision, the commission has undergone significant improvements over the last few years. The CIPC launched their modern new website in 2014 which is accessible and interactive. It is now possible to do most applications and submissions electronically online and the CIPC has slowly begun to achieve faster turnaround times.

Rob Davies, the DTI Minister, claimed that Ms. Ludin had failed to take employees along with her in her drive to modernise the commission, which he said was wracked by instability. He commented that “It was not an easy labour relations environment. There were a number of issues which we felt needed to be attended to and there was a certain amount of resistance from Ms. Ludin, who said I did not have the authority to tell her to do various things. It was becoming increasingly difficult for her to retain the confidence of staff”. Mr. Davies also stated that the trade union had presented the DTI with a petition in 2014 raising questions of management and calling for Ms. Ludin’s resignation. This was what inspired a forensic investigation into the various alleged irregularities.

Ms. Ludin commented that the commission, its staff and its ability to deliver it service had been periodically compromised, particularly when the DTI had declined to support management’s authority to run the organisation. After a paperless back-office system and automated processing were introduced, the CIPC experienced protests by NEHAWU (National Education Health and Allied Workers’ Union) on two occasions, against which Ms. Ludin claims the DTI had failed to support her. Ms. Ludin stated: “I have highlighted to the minster the risk that the DTI support for the NEHAWU agenda is perceived internally as a licence for illicit activities with intermediaries and demands for bribes”.

Ms. Ludin communicated to her staff that she felt a lack of support from her Department of Trade and Industry (DTI) minster and that there seemed to be a concentrated effort to remove her from her position, which ultimately led to her tendering her resignation, effective 1 June 2015. She stated: “I am resigning because I am no longer willing to exercise the role of commissioner without the support of the minister of the DTI, to whom I report, in the face of sporadic illegal industrial action intended to create a climate of intimidation, and allegations of misconduct and corruption intended to discredit me and some members of my management team”.

We can’t help but wonder how Ms. Ludin’s resignation will affect the operation of the CIPC. Only time will tell…

Kim Rademeyer – Partner