Legal wrangle over raid on Akani by FSCA rages on

The Financial Sector Conduct Authority (FSCA) is looking to petition the Supreme Court of Appeal (SCA) for leave to appeal against a decision by the North Gauteng High Court that it hand over evidence it relied on when it conducted a search and seizure operation at the premises of Akani Retirement Fund Administrators (Akani) last year.

At the time of the raid, the regulator said it had “sufficient information to create a reasonable suspicion that financial sector laws may have been contravened by Akani”.

The company, the largest black-owned and managed retirement fund administrator in Southern Africa, drew first blood in September in the dispute between it and the watchdog when the North Gauteng High Court ruled that it is entitled to be provided with information that led to the FSCA raiding its offices.

The FSCA’s argument was that it could not share the record as it contained information from consultations with its attorneys, making the information privileged, an argument that judge Harshila Kooverjie rejected.

“The fact that deliberations may in a given case occur privately does not detract from their relevance as it may contain evidence that led to the impugned decision.  In my view, the respondent’s concerns on the privileged information could surely be dealt with by way of a suitably framed confidentiality regime. This will enable a process whereby the said information and/or documentation would be divulged only to a category of persons agreed to between the parties,” Kooverjie ruled.

“I have noted that the documents seized in terms of the warrant remain under custody of an independent third party under an escrow agreement. As an alternative, there is no reason why the privileged deliberations with counsel can also not be dealt with in a similar manner.”

Three weeks ago Kooverjie dismissed the FSCA’s application for leave to appeal her earlier decision.  Business Day has it on good authority that the FSCA has indicated to Akani that it will be petitioning the SCA for leave to appeal against Kooverjie’s ruling that it hand the record over to Akani.

“We find it quite perplexing that a public institution such as the FSCA is refusing to hand over the record that led to the decision for a search and seizure operation on Akani offices even after losing their application for leave to appeal. Instead of handing over the record, they have decided to run to the SCA,” said Akani chair Zamani Letjane.

“They are in contravention of PAIA [Promotion of Access to Information Act], that compels public institutions to release information in the public interest to stakeholders and citizens. We are a legitimate business that has been in operation for more than 20 years, we have every right to know what led the FSCA to take such a drastic measure to impugn our reputation and credibility.”

The FSCA did not respond to requests for comment.

Khumalok@businesslive.co.za