Debarment is reserved for cases where a representative’s actions clearly demonstrate a lack of honesty and integrity sufficient to disqualify them from serving in the financial services industry, the Financial Services Tribunal (FST) held when it set aside the debarment of a banker formerly employed by ABSA.
ABSA accused the applicant, Onke Maxilana, of being responsible for delays in actioning clients’ requests.
Maxilana argued that the delays stemmed from a lack of adequate support, specifically pointing to his manager and the sales support consultant (SSC). He explained that, under significant work pressure, he had delegated the tasks in question to the SSC, believing this was a reasonable course of action given his workload. Unbeknown to him, the SSC failed to attend to these matters, which resulted in the delays that ABSA later attributed to him. Manxilana asserted this failure by the SSC, rather than any intentional misconduct on his part, was the root cause of the issue.
Despite his defences, a disciplinary inquiry concluded that Manxilana’s conduct warranted a finding of guilt for gross negligence and dishonesty. This outcome led to his termination and debarment in March 2024.
ABSA’s decision to debar him stemmed from allegation that he failed to comply with the “fit and proper” requirements demanded by the FAIS Act and Board Notice 194 of 2017, pinning him with charges of gross negligence, dishonesty, and tarnishing its reputation. These accusations were based on one incident – out of four he was charged with – where he allegedly failed to action a client’s request within a reasonable period and then misrepresented the situation to both the client and his manager to cover up his “negligence”.
Threshold for dishonesty
The Tribunal said the key issue was whether Manxilana’s purported dishonesty – specifically, misrepresenting information to a client and his manager – meant he was disqualified from being a representative. To answer that, the seriousness of what he did mattered.
The charge sheet stated that, on 25 October 2023, Manxilana met with a new client but did not create a work item until 5 December. On 7 February 2024, the frustrated client contacted Manxilana’s manager.
ABSA accused him of two things: not handling the request within an acceptable timeframe and repeatedly mispresenting the status of the request to the client.
Manxilana’s submitted that he explained the account-opening process to the client, who delayed sending documents until he went on leave on 22 December. He passed the task to a colleague. After a meeting with the client in January, the account was set up, but the client did not sign the paperwork promptly. The colleague who had taken over the work also went on leave. Manxilana was the impression that the job had been done, as promised, only it wasn’t.
The Tribunal referred to a previous case, Fahdia Osman v First National Bank (2021), for guidance to determine whether the dishonesty of which Manxilana was accused disqualified him from holding the position of a representative.
In that decision, the FST emphasised that “a single act of dishonesty, negligence, incompetence, or mismanagement may not by itself constitute prima facie evidence or absence of honesty and integrity. Such dishonesty, negligence, incompetence, or mismanagement must be sufficiently serious to impugn the honesty and integrity of the person concerned.”
The Tribunal underscored that debarment serves a protective function – to shield the public from unscrupulous individuals. It assessed Manxilana’s conduct in this light, examining the nature of his misrepresentation.
The Tribunal found that Manxilana’s statements to his manager and the client were based on a mistaken belief that the SSC had taken ownership of the account. The judgment stated: “The misrepresentation in this case relates to a mistaken belief in the truth of the information and cannot be said to be dishonest.”
This finding distinguished his actions from intentional deceit, a critical factor in determining whether debarment was appropriate. Although the Tribunal acknowledged that Manxilana’s failure to verify the account’s status might reflect negligence, it concluded this did not reach the threshold of dishonesty required to justify debarment.
Additionally, the Tribunal noted that the evidence relied upon by ABSA was not fully presented to it. However, even accepting the bank’s version of events, the Tribunal determined that Manxilana’s conduct might merit internal disciplinary action but fell short of warranting a sanction as severe as debarment.
The Tribunal set aside ABSA’s debarment of Manxilana and remitted the matter back to the bank for reconsideration.
The case serves as a reminder to FSPs of the high evidentiary bar for debarment under the FAIS Act. Negligence or mismanagement alone, absent clear evidence of intentional dishonesty or serious misconduct, does not suffice.
