The Financial Services Tribunal (FST) has dismissed a reconsideration application by a representative who was debarred for not returning a tablet to his employer.
The applicant, “MN”, became a representative of AC Capital (Pty) Ltd in December 2021, with a mandate to sell long-term insurance: sub-category B1 and short-term insurance: personal lines financial products.
AC Capital provided MN with a tablet so he could complete various assessments and then use it for business purposes. But MN did not complete the assessments, and he did not undertake any duties on AC Capital’s behalf.
AC Capital terminated MN’s employment in August 2022, saying he deserted his position.
According to the record before the Tribunal, AC Capital communicated repeatedly with MN, asking for the tablet to be returned. MN acknowledged that he ought to return it, but he has not done so.
In February this year, AC Capital debarred MN for no longer meeting the honesty and integrity standards of the Fit and Proper Requirements. The FSP alleged MN had stolen the tablet.
MN brought his reconsideration application on the following grounds:
- He never commenced employment with AC Capital and therefore it could not debar him;
- He was unaware of the debarment process; and
- AC Capital should have filed a criminal case against him for the theft of the tablet instead of debarring him.
He also contended that he was locked out of his residence by his landlord and had relocated, and therefore he did not have access to the tablet, to return it.
Appointment as a representative
The Tribunal did not accept any of MN’s contentions.
The fact that MN never commenced selling AC Capital’s financial products nor earned remuneration did not disturb the conclusion, based on the documentary evidence (the signed mandate and confirmation of his representative mandate) that MN was appointed as the FSP’s representative, the FST said.
This meant MN became subject to the Fit and Proper Requirements, including the obligation to act with honesty and integrity. Furthermore, section 14(1) of the FAIS Act compelled AC Capital to debar MN from rendering financial services when it became clear to the FSP that he no longer complied with these requirements.
The Tribunal said the evidence of the repeated communications between the parties included the notice of the intention to debar and the debarment decision. There was no evidence that MN was unaware that AC Capital had initiated and subsequently completed his debarment.
The third ground – that a criminal case ought to have pursued rather than debarment – was “irrelevant”. The possibility of criminal enforcement action before other bodies in addition to proceedings before the FST did not detract from the Tribunal’s task in the reconsideration proceedings.
Regarding MN’s contention that he could not access his residence and that he had relocated, the Tribunal found that, on a balance of probabilities, this was an inadequate explanation for failing to return the tablet for almost two years. It also demonstrated that MN was aware that he should not have retained possession of the tablet.
MN’s persistent failure to return the tablet to AC Capital was material and demonstrated dishonesty and/or a lack of integrity as is demanded of a representative under the FAIS Act, the Tribunal said.
