'Company hijacking': corporate fraud advances in Brazil through public registration
Owners of legitimate businesses discover they have lost control through false contractual acts filed with commercial registries. The phenomenon concerns legal experts and authorities in Brazil.
"Company hijacking": corporate fraud advances in Brazil through public registration
According to valor.globo.com, a form of fraud is growing in Brazil in which criminals assume control of regularly established companies through false documents filed with the Commercial Registry. The phenomenon, termed "company hijacking", goes beyond simple document forgery.
The practice consists of artificially fabricating a new legal reality. With forged contractual acts and properly registered, the fraudsters manage to shift corporate control, alter the company's legal representation and produce concrete effects with banks, suppliers, tax authorities and good-faith third parties.
The legitimate owners of the businesses, in increasingly grave situations, only discover what has occurred after they have already been removed from ownership or administration — without any participation in the acts that formalised this change. The consequence is a double victimisation: the company is used in the name of the fraudsters while the true owners attempt to judicially reverse a legal reality that has come to exist in official records.
The vulnerability of the public registration system for commercial businesses is identified as a central factor in the proliferation of this type of crime. The absence of rigorous verification of the authenticity of documents presented to commercial registries allows fraudulent corporate contracts to circulate and produce legal effects before any challenge.
The impact extends beyond the partners directly harmed. Suppliers who enter into contracts with the company under illegitimate control, financial institutions that grant credit and tax authorities that recognise tax obligations based on these registrations can all be affected by the chain of effects produced by the "hijacking".
Source: Google News BR — Crime