Representative ‘conspired’ with client to have complaint withdrawn

A representative conspired with a client in an attempt to have the complaint against him withdrawn, the Financial Services Tribunal said in its decision to uphold his debarment.

Sanlam Developing Markets (SDM) debarred Bongumenzi Zungu after finding that he submitted an application for a policy without the client’s knowledge or consent. The client became aware of this when a premium was deducted from his account and lodged a complaint.

According to the tribunal, Zungu told the forensic investigator that the client had complained in order to get out of paying premiums and wanted to be refunded what he had already paid.

However, in WhatsApp conversations provided by the investigator, the client emphasised that he did not sign up for a policy and that Zungu must refund his money, or he will complain to SDM. Zungu undertook to pay back the premiums in exchange for the client withdrawing the complaint. However, at this point, SDM had cancelled the policy and reimbursed the client all his premiums.

“What this tells one is that the applicant interfered with the investigation and conspired with the complainant to withdraw the complaint. The applicant’s exculpatory explanation as to why he paid an amount equal to the disputed premiums to the complainant lacks credulity,” the tribunal said.

In his reconsideration application, Zungu also relied on section 14(5) of the FAIS Act: an FSP that intends to debar someone who is no longer a representative must initiate proceedings not longer than six months from the date on which the person ceased to be its representative.

Zungu ceased to be a representative of SDM on 2 March 2021, which means the debarment proceedings had to start before 2 September 2021.

SDM showed that the notice of intention to debar was emailed to Zungu on 6 August.

Zungu alleged that he learnt of the intention to debar him on 8 October but did not say how he learnt of this. He also did not address, in reply or in his heads of argument, SDM’s evidence of the date of the notification, the tribunal said.

He also told the tribunal that the termination of his employment was the subject of a settlement before the Commission for Conciliation Mediation and Arbitration (CCMA), and that SDM had undertaken at the CCMA not to proceed with a debarment.

The tribunal said SDM had “correctly” responded that the HR process followed at the CCMA was a separate process to a section 14 debarment, and, in addition, that no agreement had been made at the CCMA concerning the debarment process.

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