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Hadebe v Assupol Life Limited (FSP50/2023) [2023] ZAFST 157 (19 November 2023)

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THE FINANCIAL SERVICES TRIBUNAL

 

Case No: FSP50/2023

 

 

In the matter between:

 

ZINHLE KELLY HADEBE                                                       Applicant

 

and

 

ASSUPOL LIFE LIMITED                                                      Respondent

 

Summary: Fairness of Debarment

 

 

DECISION

 

 

A.     INTRODUCTION

 

1.       The Applicant brings this application in terms of Section 230 of the Financial Sector Regulation Act 9 of 2017 ("the FSR Act").

 

2.       The Respondent employed the Applicant as a sales representative and a key individual as contemplated in the Financial Advisory and Intermediary Act 37 of 2002 ("FAIS Act").

 

3.       The Respondent is an authorised Financial Services Provider as contemplated in the FAIS Act.

 

4.       The parties have agreed that this matter can be decided on the papers filed, and this is that decision.

 

B.      THE FACTS

 

5.       The Respondent received an anonymous tip-off alleging dishonest conduct by the Applicant and others. The tip-off indicated that three ladies ("the representatives"), the Applicant included, attended on the PRASA workplace and had bribed the informant's colleagues. This triggered a forensic investigation on the 5th of October 2022.

 

6.       The common cause facts determined by the investigation were that:

 

6.1       The representatives, while denying having bribed the PRASA employees, admitted to paying clients from the Pine Town Clinic R100.00 each;

6.2       The reasons for paying the clients were that they had received similar 'gifts' from other insurance companies;

 

7.       The forensic department's findings included that the Applicant, by her own admission, had paid clients to induce them to write new business in contravention of the FAIS Act.

 

8.       The Applicant suggested that the payments were only made after the policies were written and, therefore, did not constitute a bribe.

 

9.       The forensic department recommended that the Respondent must take the appropriate action against the Applicant in terms of the FAIS Act.

 

10.   On the 10th of August 2023, the Respondent gave the Applicant notice of a debarment hearing that would be held on the 5th of September 2023. The charges included:

 

10.1    Dishonesty, lack of integrity and/or good standing as follows:

 

"It is alleged that on the 21st of November 2022, you agreed to have bribed potential clients at Pinetown Clinic by paying them R100.00 to take out policies with Assupol Life".

 

10.2   Dishonourable and unprofessional conduct in rendering financial services as follows:

 

"It is alleged that you failed to render financial services with honesty, integrity, due skills, care and diligence and demonstrated unwillingness to comply with business conduct, regulatory and professional requirements".

 

11.   The debarment hearing was held virtually on the 5th of September 2023, and the Applicant was present.

 

12.   The chairperson of the debarment hearing found the Applicant guilty of the aforementioned charges and recommended that she be debarred. The reasoning behind the chairperson's finding was that despite her plea of not guilty and her explanation at the debarment hearing, the Applicant had previously admitted on affidavit that she had given the client's money (R100.00 each) and whether this payment was made before the policy was written or afterwards was of no consequence.

 

13.   The chairperson concluded the following:

 

13.1   The Applicant is no longer fit and proper and does not possess the personal characteristics of honesty and integrity as required in the FAIS Act; and The Respondent should debar the Applicant in accordance with Section 14 of the FAIS Act.

 

C.     LEGAL FRAMEWORK

 

14.   Section 14(1)(a) of the FAIS Act provides the following:

 

"14. Debarment of representatives – (1)(a) An authorised financial services provider must debar a person from rendering financial services who is or was, as the case may be –

 

(i)        a representative of the financial services provider; or

(ii)       a key individual of such representative,

if the financial services provider is satisfied on the basis of available facts and information that the person –

(iii)      does not meet, or no longer complies with, the requirements referred to in section 13(2)(a); or

(iv)      has contravened or failed to comply with any provision of this Act in a material manner." (Emphasis added)

 

15.   Section 13(2)(a) of the FAIS Act provides that an authorised financial services provider must at all times be satisfied that the provider's representatives, and the key individuals of such representative, are, when rendering a financial service on behalf of the provider, competent to act, and comply with (i) the fit and proper requirements; and (ii) any other requirements contemplated in subsection 1(b)(ii).

 

16.   Section 13(1)(b)(iA) of the FAIS Act provides that a person may not act as a representative of an authorised financial services provider, unless such person meets the fit and proper requirements.

 

17.    In terms of section 6A(2)(a) of the FAIS Act, fit and proper requirements include, inter alia, appropriate standards relating to personal character qualities of honesty and integrity.

 

18.   Section 14(3)(a) provides that a financial services provider must, before debarring a person:

 

18.1       give adequate notice in writing to the person stating its intention to debar the person, the grounds and reasons for the debarment and any terms attached to the debarment, including, in relation to unconcluded business, any measures stipulated for the protection of the interests of clients;

 

18.2       provide the person with a copy of the financial services provider's written policy and procedure governing the debarment process; and

 

18.3       give the person a reasonable opportunity to make a submission in response.

 

19.   Section 14(3)(c) provides that the financial services provider must immediately notify the person in writing of:

 

19.1   its decision;

19.2   the person's rights in terms of Chapter 15 of the FSR Act; and

19.3   any formal requirements in respect of proceedings for the reconsideration of the decision by the Tribunal.

 

D.     DISCUSSION

 

20.   On the common cause facts, the Applicant breached the requirements mentioned above.

 

21.   It is clear that the Applicant's conduct amounted to a bribe, and the explanation that the money was only provided after the policies were written changes nothing. The Applicant's conduct indicates a lack of integrity.

 

22.   Once the Respondent had established the facts, it was required to debar the Applicant.

 

23.   The Respondent complied with all of the required formalities with respect to the debarment proceedings.

 

24.   In the circumstances, the Tribunal can find no grounds to interfere with the Respondent's decision to debar the Applicant.

 

ORDER: The application for reconsideration is dismissed.

 

 

Signed on 19 November 2023

 

PJV Veldhuizen (member)