On 31 March 2015, Julius Cobbett reported on an appeal case currently being heard by the FSB Appeal Board in Pretoria.
The directors of Sharemax are appealing against a FAIS Ombud determination in which they were held liable, together with the intermediaries involved, for losses sustained as a result of a property syndication investment.
Advocates for the appellants argued that the Ombud exceeded her powers in two determinations against their clients when “…she found the advisers liable, and extended this liability to four Sharemax directors…”
The article states that the determinations were made in January 2013. Since the Appeal Board agreed to hear the appeal, all other complaints concerning property syndications were suspended until the outcome of the appeal.
The two intermediaries involved did not appeal against the determination.
“The complainants were Gerbrecht Siegrist, 75, and Jacqueline Bekker, 76. Siegrist’s attorney Danie Goosen submitted a notice to abide by the chairman’s ruling. His client did not submit heads of argument. Bekker informed the appeal panel that she could not afford legal advice and her request for legal aid was denied.”
“Although the Fais Ombud was neither a respondent nor appellant, she was represented by former pension funds adjudicator Vuyani Ngalwana.”
“One of the main arguments made by the Sharemax directors was that the Ombud exceeded her powers when she pierced the corporate veil and found them liable. Brett pointed out that the original complaints were against the financial advisers, respectively Botha and Carter-Smith, and not against the Sharemax directors at all. The Fais Ombud took it upon herself to make Sharemax and its directors respondents.”
The appeal has not been finalised yet.
There was a similar appeal last year, on which we will be reporting next week.
Please click here to read the full Moneyweb article.