The Financial Services Tribunal (FST) has declined applications by an FSP for the FSCA to reconsider provisionally suspending its licence and initiate an investigation.
Anova Wealth (Pty) Ltd, a licensed Category I and II FSP since February 2017, found itself under scrutiny when the FSCA received a formal complaint from the Security Employees National Provident Fund (SENPF) in February last year.
Pursuit to an investigation, the Authority provisionally suspended Anova’s licence on 28 October 2024. The suspension terms required Anova to inform affected clients, cease new business, and transfer existing business to another authorised provider, with the condition that it would remain in effect until compliance was achieved or a response provided.
Anova sought an extension to reply to the Authority’s decision of 28 October, which was granted based on an admission by Anova that the SENPF’s funds were invested in private equity and not a balanced fund as agreed with the fund.
In its reply of 12 December, Anova refused to answer the FSCA’s questions on the ground that the Authority does not have jurisdiction to obtain the requested information.
On 21 November 2024, the FSCA initiated an investigation into whether Anova, Laurett Jordim – Anova’s sole key individual – and two members of staff had contravened or might be contravening certain laws. This was followed by a subpoena on 13 January 2025.
Anova responded to the subpoena on 14 January. It demanded clarification on the relationship between the two cases; withdrawal of the “procedurally defective decision” and the upliftment of the provisional suspension; suspension of any further investigations pending proper procedural rectification of the defects; and an explanation of why the Authority had not responded to its letter of 12 December.
The Authority rejected the demand on 16 January. It explained that there are different divisions within the Authority that are tasked with different responsibilities. The decision to provisionally suspend was made by the Conduct of Business Supervision Division and the present notice was by the Enforcement Division. There was therefore no link between the two matters.
Anova, facing these dual actions, lodged applications on 3 February 2025 for the reconsideration of the provisional suspension, as well as condonation for not lodging the reconsideration application within 60 days. It also lodged an urgent application for the investigation to be suspended.
The Tribunal’s decision to decline the applications rested on distinct yet overlapping legal and procedural grounds.
Bid to halt the investigation
Anova sought an urgent order to suspend the FSCA’s decision to proceed with its investigation. The application aimed to halt the investigation process, including preventing the subpoenaed individuals from complying with requests for documents. Anova argued the investigation was procedurally flawed and should await the outcome of the suspension proceedings.
The Tribunal declined the urgent application. It said section 218(k) of the Financial Sector Regulation Act (FSRA) explicitly excludes decisions to conduct investigations from the Tribunal’s reconsideration powers. This was supported by the precedent in Financial Sector Conduct Authority and Others v Deighton (2024), which Anova failed to counter.
Anova invoked the Promotion of Administrative Justice Act (PAJA), but the Tribunal ruled that the FSCA’s investigation decision is not an “administrative decision” under PAJA. Furthermore, the Tribunal lacks the authority to provide the judicial oversight Anova sought, because it is not a reviewing court.
Reconsideration of the ‘decision’ to investigate
Anova sought reconsideration of the FSCA’s decision to initiate the investigation. It sought declaratory orders deeming the investigation unlawful and an interdict to stop it, arguing it exceeded the FSCA’s authority.
The Tribunal dismissed this request based on lack of jurisdiction. As it pointed out when rejecting the urgent application, section 218(k) of the FSRA bars the Tribunal from reviewing investigation decisions.
The FST said it cannot issue declaratory orders or interdicts – these powers are reserved for the High Court. Under section 234(1) of the FSRA, its authority is limited to confirming, setting aside, or remitting decisions within its scope.
Reconsideration of the licence suspension
Anova sought reconsideration of the provisional suspension of its licence. However, it filed its application on 3 February 2025, more than a month late, necessitating a request for condonation.
Jordim, Anova’s director and shareholder, was included as a co-applicant. However, the Tribunal noted that only Anova’s licence was suspended, not Jordim’s. Her inclusion was a misjoinder – rendering her participation irrelevant to the reconsideration of the suspension.
The Tribunal refused the request for condonation, citing both the delay and the lack of substantive merit in the application, as well as the application to reconsider the suspension.
According to FST’s decision, Anova said it opted for compliance over litigation, believing that repaying the mis-invested funds to the SENPF would resolve the FSCA’s concerns and lift the suspension without Tribunal proceedings. Yet, its reply of 12 December 2024 was not an attempt to comply but a refusal to answer the FSCA’s questions, asserting the Authority lacked jurisdiction over private equity investments.
The Tribunal found this belief “unfounded and unreasonable”, noting that even if the funds had been repaid (which they hadn’t), broader compliance issues persisted, as evident in the FSCA’s decision letter. Additional grounds, such as the FSCA’s January refusal to meet Anova’s demands and an “evolving regulatory landscape”, were dismissed as premised on flawed assumptions about the investigation’s legality.
The FSCA argued, and the Tribunal agreed, that Anova’s choice to negotiate rather than file within the deadline amounted to “peremption” – a legal forfeiture of its right to challenge –rendering the issues moot.
The FSCA opposed the application’s merit, a stance the Tribunal endorsed. Anova’s argument that the FSCA lacked jurisdiction over private equity funds was deemed frivolous. The Tribunal clarified that Anova, as a licensed FSP, fell within the FSCA’s regulatory purview, regardless of whether private equity funds themselves are directly regulated.
The issue was not the nature of the investment vehicle but the “propriety” of Anova’s investment decisions, a matter well within the FSCA’s mandate.
Anova sought various forms of relief, including declaratory orders and orders setting aside subsequent decisions. The Tribunal ruled these were beyond its jurisdiction. It against referred to limits set on it powers by section 234(1) of the FSRA. It cannot issue declarations (reserved for the High Court) or address hypothetical subsequent decisions.
The Tribunal emphasized that declining the application did not permanently bar Anova from contesting the FSCA’s actions. If the provisional suspension become final, or if enforcement proceedings yielded a decision, Anova could apply for reconsideration or suspension of those outcomes.
