Harith General Partners (Pty) Ltd, one of Africa’s largest infrastructure investors, faces an administrative penalty of R1.7 million for failing to comply with provisions of the Financial Intelligence Centre Act (FICA).
Of this, R500 000 is conditionally suspended for two years, contingent on remedial action, the Financial Sector Conduct Authority said.
With more than $1.2 billion in assets under management, Harith provides investors with access to projects in energy, transport, digital infrastructure, water and sanitation, and public health. It manages the Pan-African Infrastructure Development Fund, which spans Botswana, Côte d’Ivoire, Ghana, Kenya, Malawi, Nigeria, South Africa, and Zimbabwe.
The FSCA said Harith is both a licensed financial services provider under the Financial Advisory and Intermediary Services Act and an accountable institution under FICA.
“The FSCA is responsible for supervising and enforcing compliance of FSPs with the FIC Act. The FIC Act aims, among other things, to combat money laundering, the financing of terrorism, and other related criminal activities. All accountable institutions designated under the FIC Act must comply fully with its requirements,” the Authority said.
Moonstone reached out to Harith for comment but had not received a response by the time of publication.
Inspection reveals serious breaches
The FSCA’s inspection found multiple compliance gaps.
- Risk Management and Compliance Programme (RMCP): Harith’s RMCP, required under sections 42(1) and 42(2), was found deficient. It failed to outline how the firm would report transactions to the Financial Intelligence Centre or comply with UN Security Council sanctions under section 26B.
- Customer due diligence: Sections 21, 21A, and 21B require firms to verify client identities, understand the nature of business relationships, and confirm beneficial ownership. Harith failed to meet these obligations, including verifying clients and those acting on their behalf, assessing the purpose of business relationships, and confirming beneficial owners.
- Targeted financial sanctions (TFS) screening: Harith did not provide evidence that client information had been checked against UN Security Council TFS lists, as required by section 28A read with 26B.
- Employee screening: Directive 8 obliges firms to screen employees for competence and integrity on a periodic, risk-based basis. Harith could not show that employee screening had been conducted or recorded.
Zero-tolerance stance
The FSCA said that Harith is actively engaging to remediate the identified gaps but described the breaches as serious.
“An effective RMCP is vital not only because it assists accountable institutions to protect and maintain the integrity of their own businesses but also because it helps contribute to the integrity of the South African financial system as a whole. Proper due diligence of clients and screening of client and employees against the TFS lists is crucial to help identify and mitigate against suspicious and criminal elements from infiltrating the financial system,” the Authority said.
The latest penalty follows a R10.6m sanction imposed on Sanlam Collective Investments (RF) (Pty) Ltd earlier this month for similar FICA breaches.
Read: Sanlam Collective Investments hit with R10.6m FIC Act penalty
In both cases, the FSCA combined financial penalties with directives to address non-compliance and warnings against future breaches, underscoring that the Authority will not tolerate lapses in compliance.
FICA compliance is non-negotiable, even for major institutions like those managing over a billion dollars in assets.