Remorse, personal hardship, and a previously spotless career were not enough to persuade the Financial Services Tribunal (FST) to ease the debarment of a former Momentum Insure representative.
The applicant, TP Mdakane, had been employed by Momentum Insure for nine years and had spent a total of 18 years in the insurance industry. He was suspended during an investigation into alleged misconduct and later faced three charges in an internal disciplinary process.
The Tribunal’s decision recorded the charges as follows:
Count 1 involved allegations of dishonesty and misrepresentation relating to an insurance claim under a policy held by his spouse. It was alleged that the date and location of a motor vehicle accident had been falsely recorded. At the time the accident occurred, his driver’s licence had expired, and he understood this could result in the claim being rejected. By his own admission, he had altered the information when submitting the claim.
Count 2, derivative of the first, alleged a failure to meet the honesty and integrity components of the fit and proper requirements for representatives.
Count 3 concerned the recording of referrals during the Covid-19 period and the payment of referral commissions. The company had introduced a policy change prohibiting direct referrals from being paid into representatives’ personal or business accounts, to avoid instances of double payment. According to Momentum, the change was communicated by email and published on its internal platform. The Tribunal noted that Mdakane accepted the change had been communicated, although he said he had not personally seen the notification because of remote working arrangements at the time.
It was not in dispute that certain referrals were logged by Mdakane and that referral payments totalling R117 000 were paid into the account of Montana Incorporated Projects, a company in which he was the sole director. He also received commission on all approved referrals.
Mdakane’s version was that the referrals had been made by his spouse and were legitimate. He maintained that the payments were correctly made to the company account, although he had not disclosed that he controlled the account. Momentum submitted it would not have approved payment if it had known this.
The Tribunal noted that disagreements existed between the parties’ versions of specific aspects of Count 3, particularly relating to Mdakane’s awareness of the policy and the intention behind the payment arrangements. However, because the reconsideration application did not challenge the debarment itself or the factual findings underpinning it, the Tribunal did not need to resolve these differences.
In the disciplinary proceedings, Mdakane pleaded guilty to Counts 1 and 2 and not guilty to Count 3. He was nevertheless found guilty on all charges and dismissed. He did not challenge the dismissal.
Following the dismissal, Momentum Insure initiated a debarment process under section 14 of the FAIS Act. Following a debarment hearing, the chairperson recommended Mdakane’s debarment in May 2025, and the Financial Sector Conduct Authority subsequently confirmed and recorded the debarment.
Arguments before the Tribunal
Mdakane admitted falsifying details of the motor vehicle claim and acknowledged receiving the referral commissions. He also accepted that Momentum Insure was obliged to act once the misconduct was established and that he no longer met the fit and proper requirements.
Mdakane’s case was limited to the argument that the duration of the debarment was excessive under the circumstances.
He asked the Tribunal to reduce the debarment to six months, stating he had otherwise maintained a clean record for many years and had worked successfully in the industry. He emphasised the impact on his family, including the needs of one child who attended a special-needs school with substantial associated costs. He told the Tribunal that he could not meet these expenses if unable to work.
He also acknowledged that he had exercised poor judgement, particularly in relation to the claim under Count 1. He described his actions as a mistake he made in panic when he realised his licence had expired. The Tribunal accepted his remorse, as well as his candid acknowledgement that he understood why Momentum had terminated his employment.
Momentum, however, maintained that the misconduct – particularly the admitted falsification of information submitted in an insurance claim – directly undermined the core attributes of honesty and integrity expected of representatives in the financial sector.
Tribunal’s analysis
Although the Tribunal expressed understanding of Mdakane’s circumstances and acknowledged his long career and prior clean record, it found that the nature of the misconduct was serious. In particular, the alteration of the accident details for purposes of an insurance claim was viewed as a deliberate act, regardless of whether the insurer ultimately suffered loss.
The Tribunal emphasised that the absence of financial prejudice does not reduce the seriousness of dishonesty. The test under the FAIS Act is whether the conduct shows that a representative does or does not meet the fit and proper requirements. The Tribunal found that the conduct in Count 1 alone met this threshold.
The panel also noted that Count 3 involved conduct that contravened Momentum’s policy, and Mdakane accepted the contravention even if he disputed certain surrounding details.
Given these considerations, the Tribunal concluded there was no legal basis to interfere with the debarment period.
The Tribunal noted that the FAIS framework permits individuals to apply for upliftment of debarment after the statutory period, provided they can show that they once again meet the fit and proper requirements. Nothing in its decision prevents Mdakane from pursuing this route at the appropriate time.
