“Section 14(1)(a) of the FAIS Act is not forgiving,” said the Financial Services Tribunal (FST) when it upheld the debarment of a former bank manager who defrauded her late fiancé’s estate so she could buy food for her child.
The tribunal’s decision sets out the circumstances that led up to the representative’s debarment. There is no indication that the FST or Nedbank disputed her version.
The applicant, “NT”, was employed by Nedbank as a teller in 2007. She worked her way up to become a branch manager.
Her personal and financial problems started in September 2017, when her fiancé died. They had been living together since 2014 and had a child in 2015. NT’s fiancé had taken care of all the child’s financial needs.
NT had taken out a funeral policy to cover her fiancé’s funeral expenses. But the proceeds were not paid out because of a problem with registering her fiancé’s death because he was an illegal immigrant.
NT used the surplus funds in her home loan account and the funds from an investment to pay for her fiancé’s burial in Mozambique.
NT told the FST she had expected to be appointed as the executrix of her fiancé’s estate. But his family opposed this, and a former girlfriend was made the executrix.
“On the applicant’s account, there is no love lost between the deceased’s family and herself. The deceased’s family blames the applicant for his death, and her life has been threatened. For this reason, she obtained a protection order,” the FST said.
NT left the child in her mother’s care because of the threats on her life. Having exhausted her savings and the surplus in her home loan account, she could not pay her child’s school fees and the cost of transport to school. Additionally, she was unable to buy food for the child. “She told us that the child was hungry,” the decision said.
NT had encouraged her fiancé to invest with Nedbank. His investment in a “capital disposal account” was due to mature in May 2019.
On 2 May 2018, NT changed the Nedbank account held in her fiancé’s name to a Capitec account held in her mother’s name. The next day, she changed the date of the release of the funds from 2 May 2019 to 4 May 2018. She completed an early release form, and R21 766 was paid into her mother’s account.
“The applicant did not use the money for her personal benefit. It was given to her mother to take care of the child’s financial needs,” the FST said.
Late application condoned
The tribunal’s decision does not state when or how Nedbank became aware of the fraud. NT was suspended from employment some four years later, in April 2022.
She was charged with gross misconduct in the form of dishonesty and told to be present at a disciplinary hearing on 30 June 2022. NT resigned six days before the hearing. She was found guilty and summarily dismissed.
Nedbank informed NT that she had been debarred on 28 July 2022.
NT lodged a complaint with the Commission for Conciliation, Mediation and Arbitration (CCMA). According to NT, it was only on the day of the CCMA hearing that representatives of Nedbank informed her that she had the right to apply to the FST for the debarment to be reconsidered.
NT withdrew the referral to the CCMA and lodged an application with the FST two days later, on 6 October 2022, which was more than 60 days after she was notified of her debarment.
The FST granted condonation for the late application.
Rationale for the fraud
During the hearing at the tribunal, NT conceded that what she did was dishonest, but she had not seen it as such at the time.
There was a delay in the appointment of an executor. NT believed that because an executor had not been appointed, nothing precluded her from accessing the investment to reimburse herself for the money spent on the funeral.
NT believed she was entitled to the proceeds of the policy because they belonged to her fiancé. She reasoned that if she had not used her savings and the surplus in the home loan account to pay for his funeral, she would have had money to take care of her child’s needs.
The FST said NT’s actions were dishonest, although they were “driven by desperation”.
The tribunal noted the following:
- Between May 2018 and when NT was dismissed in 2022, she did not commit another act of dishonesty.
- Despite her dismissal, NT continues to receive confidential information about the delivery of cash to Nedbank’s branch, which she could exploit for her benefit but has not.
- NT has offered to repay the money that was paid into her mother’s account.
Debarment is a requirement of the Act
In other types of legal proceedings, the events that caused NT to act as she did would constitute mitigating circumstances, the tribunal said.
“However, section 14(1)(a) of the FAIS Act is not forgiving. If a financial services provider is satisfied that a representative or key individual no longer meets the fit and proper requirements of the FAIS Act, the financial services provider must debar the representative or key individual,” the FST said.
On the facts, Nedbank could not be faulted for debarring NT, the tribunal said, and it dismissed the reconsideration application.
The FST said NT will soon have been debarred for more than one year and may be eligible for reappointment.
