Sanlam’s conflict-of-interest findings upheld in debarment reconsideration

The Financial Services Tribunal (FST) has dismissed an application for reconsideration of a debarment after finding that conflict-of-interest issues arising from a former representative’s conduct were “unassailable”.

The applicant, Tiyani Mbalati, resigned from Sanlam Developing Markets in December 2024. Before his resignation, Sanlam commissioned a forensic investigation into aspects of his conduct while in its employ. The investigation gave rise to a notice of intention to debar issued in May 2025, followed by a virtual debarment hearing held in June 2025.

In its debarment notice, Sanlam recorded that Mbalati had failed to declare personal and external business interests, as required by his employment contract and the group’s conflict-of-interest policies. These interests related to entities that were subsequently appointed as vendors to Sanlam. Sanlam further concluded that Mbalati was involved in procuring services from, and approving payments to, those entities without disclosing the relevant conflicts of interest.

The debarment decision also recorded findings by the investigation relating to unauthorised private work conducted during company time, the use of Sanlam’s laptop and email infrastructure for external business activities, and concerns about possible irregularities linked to invoices processed through the entities concerned.

Based on these findings, Sanlam concluded that Mbalati no longer satisfied the fit and proper requirements and proceeded to debar him.

Mbalati applied to the Tribunal for reconsideration of the debarment. He challenged the decision on several grounds, including that Sanlam had failed to comply with the procedural requirements of section 14 of the FAIS Act, had not provided all relevant documentation, and had not properly considered his written representations before taking the decision to debar.

He also contended that the reasons for debarment were not comprehensively or conclusively established.

Tribunal’s findings

In its decision handed down in January, the Tribunal rejected Mbalati’s arguments. It held that Sanlam followed a procedurally fair process and complied with the requirements of the FAIS Act. The Tribunal noted that Mbalati was given notice of the intention to debar, afforded an opportunity to make written submissions, and the debarment decision was taken after those submissions were considered.

In addressing the substance of the debarment, the Tribunal emphasised that an authorised financial services provider has a legal duty to ensure that its representatives meet the fit and proper requirements, and where a representative’s conduct falls short of those requirements, the provider is obliged to debar.

The Tribunal considered whether Sanlam’s decision was one it was entitled to make on the information before it. In this regard, the Tribunal placed particular weight on the conflict-of-interest issues identified by Sanlam.

The FST noted that the conflict-of-interest issues arose from Mbalati’s involvement in two entities – Mintirho Trading and Projects CC and Lorato Lwa Batha Foundation NPC – which were subsequently appointed as vendors to Sanlam, and in respect of which Sanlam concluded that the relevant interests and conflicts had not been disclosed.

“The applicant’s conduct in relation to his involvement with Lorato and Mintirho and his utilisation of the respondent’s assets and infrastructure during regular working hours makes the conflict-of-interest issues unassailable,” the Tribunal said.

On this basis, the Tribunal concluded there were no grounds to interfere with Sanlam’s decision and dismissed the application for reconsideration.