Eastern Cape co-ops ripped off

Co-ops such as these are being ripped off in the Eastern Cape.

Co-ops such as these are being ripped off in the Eastern Cape.

The use of so-called consultants to assist co-operative members to register the details of their business with the Companies and Intellectual Property Commission (CIPC) is a growing problem in the Eastern Cape.

This has emerged after Director-General of Trade and Industry, Lionel October, recently warned about the practice.

Nomaci Qabaka, who owns the successful Xhobani Projects co-operative at Mdantsane outside East London, and also oversees 150 ventures in Buffalo City as chairperson of the local co-operative union, confirmed that these fly-by-night “consultants” were preying on the “vulnerable”.

“Our people are very enthusiastic about getting their businesses up and running, and so pay off anybody who says that they can register them quickly.

They very often do not realise that it is cheaper to register through the CIPC. These consultants know this, saying that the normal process will take ages,” she said.

“These consultants are very charming. They are very clever. They present themselves in a way that people don’t even ask for documents or proof that they are qualified as consultants. Members just believe that they are who they say they are, like someone saying he is a lawyer might do.”

In his warning, October said that in some instances, consultants would ask as much as R3 000 when registration through the correct channels cost as little as R170. This was confirmed by Qabaka.

“One of the problems we have here in Buffalo City is that Trade and Industry is not as visible as it is in bigger centers like Pretoria or Port Elizabeth, and so it is very difficult to tell everyone about the dangers of paying off consultants.

“I often have to use my own car and petrol to get to the outlying areas to warn people myself. The lack of money for this purpose remains a problem. We have to be foot-soldiers spreading the word, and we can’t be everywhere all the time, which is why a lot of people are not warned.”

That said, October revealed that even the CIPC offices in Sunnyside, Pretoria, were overrun by “consultants” who solicited and canvassed people entering the premises.

“It is a big problem, but we are always trying to help. We cannot allow vulnerable people to fall victim to these ‘consultants’,” Qabaka said.

Managed by qualified fashion designer Zanele Nongabe, Xhobani Projects specialises in the manufacturing of recycled glass beads, as well as a wide range of beadwork and related products, including jewellery, corporate gifting and décor items.

Xhobani Projects employs 16 people and is recognised as a best practice example of sustainable community development in the region. In addition to manufacturing, it also offers two specialised training courses.

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  • Clement The-designer Miya

    Yes, the lack of knowledge causes people to suffer…awareness campaigns on public services are crucial, otherwise people will be reaped off & discourage compliance.

  • Vukile Hlongwa

    Paying for the time a professional qualified consultant put into helping you with the registration of your co-operative if you do not have time or find it complicated to do it yourself is not a problem, but paying R3000 just to register a co-operative is a rip off. These so called Business Consultants have no education background that qualifies them to offer the services they offer. They form 80% of the CIPC visitors on daily basis and in most cases they lie to the poor rural people who do not have a choice but to believe then as they want their business to start as soon as possible. In most cases you find people have already been promised jobs which make registering of a co-operative more like an emergency and urgent need.

    My fellow entrepreneurs either its CIPC, SARS or Labour , you do not need a consultant to do your registrations. Professional qualified Consultants work is to assist those people who want to buy time and professional service and not to pay for shot cuts.

    Its really bad that the so called consultants who only their work is to assist people with their CIPC registration have now painted our industry all monster picnic with people who engage in fraud and misrepresentations.

    Before you deal with someone either registering your business or any other service, make sure you check their professional body registration so that when you have a problem with that person you can complain to that body and the body with then deal with that person.

    Stop looking for these consultants and offer money for them to ” make a plan” as they understand your situation.

    CIPC please go to the rural areas and educate people