WATCH: South Africa deserves to know – FSCA raid was a blatant abuse of power
Economy / 10 October 2019, 10:32pm / Sizwe Dlamini
CAPE TOWN – The Sekunjalo Group has instructed its legal counsel to institute a multimillion-rand damages claim against the Financial Sector Conduct Authority (FSCA), the officials who raided its offices on Wednesday and the FSCA’s caretaker commissioner, Abel Sithole.
Sithole is also the chairperson of the Financial Services Board, as well as the principal officer of the Government Employees’ Pension Fund (GEPF), which, ironically, is being sued by AYO Technology Solutions.
Sekunjalo further instructed its counsel to apply for the dismissal of the FSCA application for abusing the search and seizure clause in the FSCA Act, according to a statement by the chairperson, Dr Iqbal Survé.
Survé reiterated that there was a huge conflict of interest, as the chairperson of the FSB and the FSCA caretaker commissioner was Sithole, who is also the principal officer of the GEPF, whose funds the Public Investment Corporation (PIC) invests.
“I do solemnly believe this is also an underhanded attempt to obtain information relating to our legal case against the PIC and the GEPF.
“Of great concern to us, however, is that the information and method of retrieving this data, has potentially put these companies into a tenuous position, as the company computers and hard drives also contain sensitive information pertinent to the day-to-day business of each company that can potentially benefit rivals, if it falls into the wrong hands,” said Survé.
AYO has been at the centre of the recent PIC Commission of Inquiry into alleged wrongdoing at the state asset manager, which is also a shareholder in AYO. AYO chairperson advocate Wallace Mgoqi announced earlier this year that the company’s intention to sue the GEPF and the PIC for damages against the company and the claim was expected to run into billions of rand.
Survé said: “I cannot speak for AYO, as I am not on the board or part of the management team, but I can speak for Sekunjalo, and categorically confirm that there is nothing untoward in our business practices or ethics. I am also of the opinion this is true of AEEI.
“We see no basis for the suggestion that the purchase of shares by the Sekunjalo Group in AYO is share manipulation. Sekunjalo has the right to purchase shares in any company and has today spent hundreds of millions of rands purchasing shares on the JSE in various companies.”
In a statement after the raid, the FSCA said that the operation was conducted as part of an investigation into allegations of prohibited trading practices, in possible contravention of section 80 of the Financial Markets Act.
“As a market conduct regulator, the FSCA is mandated in terms of the Financial Sector Regulation Act, 9 of 2017 to investigate and, in appropriate instances, take enforcement action in cases of market abuse on the financial markets,” reads the statement.
It should be noted that the FSCA has not raided any other company in South Africa, in the way it raided the Sekunjalo offices. Survé described the FSCA’s action as a blatant abuse of power, with a specific purpose to achieve private and personal agendas.
“For the record, had the FSCA asked, we would have been more than willing to hand over the requested documents. At least 90 percent of the information that they were allegedly looking for is already in the public domain and could easily have been accessed via a request for information via a normal subpoena.
“There was absolutely no need for the issuing of such a warrant. It is an unprecedented and draconian measure, which also incurred significant cost to the regulator,” Survé said.