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THE FINANCIAL SERVICES TRIBUNAL

("the Tribunal")

 

CASE NO. FSP 26/2023

 

POOBENDREN (CLIVE) PILLAY                                             APPLICANT

 

and

 

CAPITEC BANK LIMITED                                                     RESPONDENT

 

Summary: Reconsideration of debarment.

 

 

DECISION

 

 

A.      INTRODUCTION

 

1.          The Applicant is Poobendren (Clive) Pillay, an adult male, erstwhile employee and representative of the Respondent.

 

2.          The Respondent is Capitec Bank Limited, a bank duly registered in terms of the Banks Act 94 of 1990. The Respondent is a registered financial services provider as defined in the Financial Advisory and Intermediary Services Act 37 of 2002 ("the FAIS Act") and the decision-maker whose decision the Applicant challenges herein.

 

3.          The Applicant brings this application for the reconsideration of his debarment in terms of Section 230 of the Financial Sector Regulation Act 9 of 2017 ("the FSR Act").

 

4.          After bringing this application for the reconsideration, the Applicant applied for the suspension of his debarment in terms of section 231 of the FSR Act. ("the suspension application"). The Respondent opposed the suspension application and filed an opposing affidavit. The deputy chairperson of the Tribunal ruled in favour of the Applicant. The ruling held as follows:

 

"The application for suspension of the debarment is granted. The Tribunal has held before in Hugo FSP 6/2022 as follows:

 

"As indicated earlier, it is unnecessary (and inappropriate) to say more about this aspect of the debarment. The reason is that sec 14(1)(b) of the FAIS Act states: The reasons for a debarment in terms of paragraph (a) must have occurred and become known to the financial services provider while the person was a representative of the provider. A person requires a service contract or other mandate from an FSP to be a representative (sec 13(1)(b)) read with the definition of "representative" in sec 1). Hugo was no longer employed by, nor did he have a mandate from, the Respondent at the time when the Respondent became aware of the breach of confidence. The fact that he was still on the public and internal registers as FSR did not change this. This means that the Respondent could not have debarred Hugo on these facts."

 

The alternative proposition that the Tribunal might exercise its discretion in terms of sec 234(1) has little merit. The discretion arises only once there was a decision with underlying jurisdiction."

 

5.          In the light of the outcome of the suspension application, the Respondent elected not to oppose this reconsideration application save to address the Tribunal on the issue of costs, the Applicant having alleged exceptional circumstances existing to warrant costs  being granted against the Respondent.

 

6.          The parties agreed to waive a formal hearing by the Tribunal and agreed that the Tribunal could decide the matter on the papers. This is that decision.

 

B.      THE FACTS

 

7.          The Applicant was initially employed with Mercantile Bank, now a division of the Respondent, in 2019. He resigned on 26 November 2022 and was to serve a one-month notice period.

 

8.          The Applicant was leaving the Respondent's employ to join a competitor, namely African Bank. Applicant was placed on gardening leave during his one- month notice period and ultimately joined African Bank on 1 November 2022.

 

9.          During February 2023, three months after Applicant had joined African Bank, Respondent's attorneys wrote a comprehensive letter of demand to the Applicant alleging inter alia that he had breached his duties of confidentiality to the Respondent, which conduct amounted to unlawful competition. Respondent's attorneys demanded certain undertakings. Applicant denied that he had violated any duties to the Respondent and offered various explanations which are irrelevant for the reasons which will be apparent by the decision reached by the Tribunal herein.

 

10.     On 30 March 2023, the Respondent advised the Applicant of its intentions to debar him in terms of section 14(3) of the FAIS Act and, having solicited and received his submissions in response to the intention to debar him, debarred the Applicant.

 

C.      THE LAW

 

11.     Section 14 of the FAIS Act provides:

 

12.     It is clear from section 14 (b) above that the jurisdictional fact required for the Respondent to have debarred the Applicant is that the reasons for the Applicant's debarment must have occurred and become known to the Respondent while the Applicant was a representative of the Respondent.

 

D.      DISCUSSION

 

13.     The Respondent confirmed in its affidavit opposing the suspension application that it only conducted its investigation into the Applicant's alleged impropriety during December 2022. This was after the Applicant had resigned and was no longer a representative of the Respondent. On this ground alone, the debarment must be set aside, and for this reason, it is unnecessary to deal with the second and third grounds raised by the Applicant.

 

E.      COSTS

 

14.     The Applicant has suggested that exceptional circumstances warrant the Respondent being mulcted with costs. I disagree.

 

15.     While it is apparent that the procedure adopted by the Respondent was incorrect, I do not accept that it meets the requirement of exceptional circumstances. I do accept that the Respondent was labouring under a bona fide but mistaken belief that it was under a legal duty to debar the Applicant.

 

16.     When the Respondent's error had been highlighted in the suspension application, it withdrew its opposition to this application. It could do nothing more than that – it could not withdraw the debarment, as it was now functus officio.

 

17.     In the circumstances, I do not intend to make an order regarding costs, as requested by the Applicant.

 

F.      ORDER

 

18.     The application for reconsideration is upheld, and the debarment is set aside.

 

19.     There is no order as to costs.

 

 

DATED AT CAPE TOWN ON THIS THE 12TH DAY OF SEPTEMBER 2023.

 

PJ Veldhuizen

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