ALLAN GREENBLO: Did Mboweni think this one through?
It’s impossible that the minister was unaware of the matter that lay behind a judgment involving the man he has temporarily appointed to do the work of Financial Services Conduct Authority commissioner
With so much on the plate of finance minister Tito Mboweni, who is trying to generate a little warmth for the SA economy, it’s perhaps unavoidable that a few crumbs will fall off. One recently did. It relates to Mboweni’s appointment of Dube Tshidi to “perform the functions of commissioner” at the Financial Services Conduct Authority (FSCA).
The appointment runs for three months, until 5 November, or until a new commissioner assumes office, whichever is the sooner. The search for a commissioner has so far taken the National Treasury more than 52 months, during which Abel Sithole, now at the Public Investment Corp, was acting (pun unintended).
Tshidi had a long career at the Financial Services Board; so long that he’s several years past retirement age. The board was the predecessor of the FSCA, where Tshidi, the former FSB executive officer, has headed the transitional management committee (2018-2019 remuneration R7.5m).
Mboweni seemingly hadn’t attempted to test the FSCA’s internal waters. The first executive response didn’t take long.
Within a few days of Tshidi’s appointment, FSCA divisional executive for regulatory policy and previously FSB deputy registrar Caroline da Silva gave notice of her intention to resign. The FSCA’s announcement of her resignation tersely stated: “At this stage Caroline has no plans on the next chapter of her career.”
One can read into this what one will. Da Silva might or might not have been in the running to become at least a FSCA deputy commissioner. Nonetheless, the timing of Tshidi’s appointment and Da Silva’s resignation implies something less than coincidence.
More curious is the timing that relates to a judgment in the Pretoria High Court. Though dated May 13, it was issued to the parties only on August 21. The main parties were attorney Tony Mostert and the public protector. Acting Judge Brad Wanless had denied Mostert leave to appeal against punitive costs previously awarded against him.
Strangely, August 21 was a fortnight after Mboweni’s appointment of Tshidi. So it’s possible that Mboweni was unaware of the Wanless judgment dated May 13. However, it’s impossible that he was unaware of the matter that lay behind it.
This is because, in her report of March 2019, the public protector had instructed: “The minister of finance [should] note my findings.” The report was on her “investigation into allegations of maladministration, abuse of power and improper conduct by the former executive officer of the FSB, Adv D P Tshidi, as well as systemic corporate governance deficiencies at the FSB”.
When the report was published, the FSCA said it intended to take it on review, so damning were its contents and conclusions. Throughout the investigation, which focused largely on the curatorship of certain pension funds, Mostert and Tshidi were joined at the hip.
A central issue was the curatorship and legal fees received by Mostert and his law firm, estimated at over R240m during the six years to 2011. No further quantification was possible for subsequent years because both Mostert and Tshidi “steadfastly refused to make any disclosure whatsoever”. To guess at an additional R240m might not be extreme.
Another issue, recorded in the report of the public protector, was that Tshidi had threatened Sanlam and Alexander Forbes that he’d withdraw their operating licences if they persisted in resisting Mostert’s demands.
Early last year Mostert attempted to interdict publication of the public protector’s report. Not only was he unsuccessful; Wanless ordered that he personally pay the costs on the punitive scale of attorney and client.
In his action Mostert had cited various pension funds under his curatorship as co-applicants. “It is difficult to understand why they are applicants herein,” the judge stated. “The court agrees that the pension funds and members thereof should not be mulcted on costs.”
In his decision this year, Wanless dismissed Mostert’s application for leave to appeal against the costs order “because of the character of the litigation, the conduct of [Mostert] and the impropriety on behalf of [Mostert] in the manner in which the litigation was pursued”.
For context, these judgments were inseparable from the still surviving report of the public protector. In applying his mind to the Tshidi appointment, did Mboweni know or not know about them? Either way, an explanation wouldn’t be out of place.
There are two other little matters, of recent vintage, both also related to operating licences subject to Tshidi’s decisions. One is the unresolved saga of asset manager J M Busha, over workers’ missing millions in retirement funds, to whom the FSCA had returned Busha’s licence.
The other relates to retirement fund administrator Akani. Notwithstanding requests in past years by the Pension Funds Adjudicator for the FSB/FSCA to review its operating licence, Akani has won a court victory over NBC Holdings for administration of a workers’ provident fund.
Regarding these recent examples of market conduct, Mboweni would do well to keep an eye on how Tshidi asserts his authority; for instance, whether Tshidi has or will recuse himself from FSCA deliberations about the disclosure of curator fees.
- Allan Greenblo is editorial director of Today’s Trustee, a quarterly magazine mainly for principal officers and trustees of retirement funds.
Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.
Please read our Comment Policy before commenting.