The Financial Services Tribunal (FST) has set aside the debarment of a former Sanlam Developing Markets sales consultant after finding that the life insurer could not show that the process complied with the procedural fairness requirements of the Financial Services and Intermediary Services Act.
The decision underscores that financial services providers must be able to demonstrate compliance with the procedural safeguards governing debarments. Even where serious allegations of dishonesty are involved, a debarment may be overturned if an FSP cannot prove that affected representatives were properly notified and given a fair opportunity to respond.
According to the FST’s decision dated 10 June 2026, Sanlam debarred the applicant, Simphiwe Ndlovu, on 26 August 2025 and recorded the debarment with the Financial Sector Conduct Authority on the same date.
Case for debarment
Sanlam’s case was that complaints from clients had triggered an internal investigation. According to the decision, the FSP received complaints that Ndlovu had issued policies in clients’ names without their knowledge or consent and had forged their signatures on policy applications. It relied on a forensic investigation report dated 7 March 2025.
In its notice of intention to debar, dated 9 May 2025, Sanlam alleged that Ndlovu had fraudulently submitted four policies involving three clients without their express knowledge or consent; recorded incorrect contact numbers on the disputed policies; captured incorrect occupation details and employment dates; and submitted policies that the clients had not signed and on which their signatures had allegedly been forged. On that basis, the insurer said he no longer met the standards of honesty and integrity required of a representative.
Ndlovu challenged the debarment on substantive and procedural grounds. He said the debarment was unlawful, unreasonable, and procedurally unfair. According to the decision, he contended that he did not receive the relevant communications and only became aware of the debarment after it had already been recorded with the FSCA. He also disputed that the process leading to the debarment had been properly conducted.
Failure to prove a fair process
Sanlam maintained it had sent the notice of intention to debar to the representative’s last-known email address, and a debarment hearing had been held. Initially, the life insurer’s position was that Ndlovu attended that hearing. However, the Tribunal recorded that Sanlam could provide no proof that the notice had been sent to the correct address or received by him and later could not confirm that Ndlovu had in fact attended the hearing.
The chronology of the hearing also became an issue. Sanlam attached proof of an email titled “Debarment Invitation”, sent on 21 August 2025, indicating that the hearing would be held on 22 August 2025. Yet the insurer also told the Tribunal that the hearing was held on 26 August 2025. The Tribunal found that Sanlam could not explain the discrepancy or produce evidence showing that Ndlovu had been informed of any change in date.
That problem was compounded by the absence of a hearing record. Sanlam said it could not produce the recording or transcript of the debarment hearing because files had been deleted. During the hearing before the Tribunal, Sanlam conceded that a dispute of fact had arisen regarding the procedure it had followed and said it would abide by the Tribunal’s decision.
The Tribunal assessed the competing claims against the requirements imposed by section 14 of the FAIS Act. It noted that a debarment process must be lawful, reasonable, and procedurally fair, and that an FSP must give adequate prior notice, clearly state the grounds for debarment, provide its written debarment policy, allow a reasonable opportunity to make representations, and properly consider those representations before taking a decision.
On the evidence before it, the Tribunal accepted that Ndlovu did not receive the notice of intention to debar and was not aware of the hearing that was later held in his absence. It also found that Sanlam had failed to explain the change in hearing date or show that he had been informed of it. In addition, the FSP was unable to verify that Ndlovu had attended the hearing, notwithstanding its earlier position that he had done so.
Because the Tribunal accepted that Ndlovu had not received notice of the intended debarment or the hearing, it found that the process had not complied with the procedural protections required by the FAIS Act. It held that the process followed to debar him was irregular, unfair, and in contravention of the Act, amounting to a material procedural irregularity.
Having reached that conclusion, the Tribunal said it was unnecessary to engage with the merits of the misconduct allegations. It therefore made no finding on whether the allegations concerning unauthorised policies and forged signatures were true.
Although the Financial Sector Regulation Act permits the Tribunal to set aside a decision and remit the matter to the original decision-maker for further consideration, it found that remittal would serve no purpose in this case. Sanlam had accepted that its inability to produce the hearing recording and transcript could not be remedied, and it was unable to prove that the notice had reached Ndlovu, that he had received it, or that he had attended the hearing.
The Tribunal accordingly not only granted the reconsideration application but also set aside the debarment.
