From CompliNEWS | Financial Service Intelligence Watch

Karabo Freddy Simon Tholo v Old Mutual (debarment process-s 14(2)(a))

The Financial Services Tribunal (FST) ruling pertains to an application for reconsideration by Karabo Freddy Simon Tholo, who was debarred by Old Mutual Life Assurance Company (SA) Limited on 30 September 2022. Tholo had been found guilty of misconduct in a disciplinary enquiry, which included charges of submitting five new policies without proper authorisation and with disputed signatures. The debarment was based on a lack of honesty, integrity and good standing, and was in accordance with section 14 of the Financial Advisory and Intermediary Services Act 37 of 2002 (FAIS Act).

Tholo applied for reconsideration of the debarment decision based on section 230 of the Financial Sector Regulation Act 9 of 2017 (FSR Act), which allows for such applications. Both parties waived their right to a formal oral hearing and agreed to submit documents instead.

The Deputy Chairperson of the Tribunal found that Tholo was not given adequate notice of the grounds and reasons for the debarment, as required by section 14(3)(a)(i) of the FAIS Act. The notice of intention to debar provided by Old Mutual was devoid of the factual basis or reasons for the debarment, which prevented Tholo from responding properly. As such, the debarment process was deemed unlawful, unreasonable, and procedurally unfair to Tholo.

While the allegations that emerged during the disciplinary enquiry were serious and require further attention, the Deputy Chairperson ruled that the debarment decision must be set aside and the matter referred back to Old Mutual for further reconsideration, taking into account the requirements of section 14 of the FAIS Act. The ruling highlights the importance of providing adequate notice to parties involved in debarment proceedings to ensure a fair and just process.

Read the Full text of the FST Decision here