FSB responds to the media storm surrounding Seedat and Gihwala

14 July 2014 Jonathan Faurie
Jonathan Faurie, FAnews Journalist

Jonathan Faurie, FAnews Journalist

The core mandate of the Financial Services Board (FSB) is that as the industry regulator, they are responsible for the preservation and promotion of the integrity of the industry. The FSB also has a responsibility to create an open and honest industry that actively encourages participation in the industry by the public, based on trusting the industry.

The FSB has gained a lot of exposure in the press since the beginning of last year because of the new pieces of legislation that it hopes to introduce into the industry. However, the regulator has also been making headlines in the media lately because of the actions of Dawood Seedat, George Papadakis and Dines Gihwala.

Setting the record straight on Seedat

Towards the end of June, a number of media companies exposed allegations that Dawood Seedat, Chief Financial Officer of the FSB at the time, was involved in corrupt activities related to advice given to employees of Africa Cash and Carry. In view of Seedat’s position with the FSB, the public started to see the regulator in a different light.

In an effort to clarify the situation regarding Seedat, an urgent press briefing was held at the FSB. Advocate Dube Tshidi, Executive Officer of the FSB, said that it is unfortunate that these allegations have been raised against Seedat, but it is unfair to associate the FSB with any of the alleged activities that Seedat was supposedly involved in.

“When the allegations relating to Seedat came to our attention, we conferred with him, and he denied all of the allegations levelled against him. He resigned from his position at the FSB to protect the name and integrity of the organisation,” said Tshidi.

He added that if the accusations levelled against Seedat prove to be true, he acted independently from the FSB and did not use his position at the FSB to leverage any information that could be used to benefit the situation.

“The supposed information given by Seedat relates to his knowledge of South Africa’s tax regime gained during his time working at the South African Revenue Services. The alleged activities supposedly took place at a Mosque, not at a place affiliated with the FSB. With regards to Africa Cash and Carry, this is not a company which has any affiliation with the FSB. The nature of its business does not fall within the mandate of the FSB and if it did, the only time the FSB would ask for tax related information is when it requests a tax clearance certificatefrom a company. Tax related information does not get held by the FSB,” says Tshidi.

Nevertheless, the FSB has commenced with its own investigation into the matter to see if there is a possibility that the FSB were involved in the investigation. Tshidi points out that since the FSB has been incorporated, the company has received a clean audit every year.

“Let us not make any judgements based on allegations. Let the investigation take its course and then we can base our actions going forward on facts,” says Tshidi.

More intrigue in the Fidentia debacle

In 2007, the curtain came down on the illegal activities of J Arthur Brown and exposed one of the biggest cases of fraud that South Africa has ever known when it was reported that through Fidentia, Arthur Brown supposedly committed fraud amounting to R1 billion.

In another twist, the FSB has now received the resignation of Dines Gihwala who was the curator of Fidentia. He has resigned from all financial services relating to Fidentia Asset Management, Bramber Alternative and Fidentia Holdings and because the curator of a fund is appointed by the High Court, the resignation will only be confirmed once the court has processed this resignation.

“Following this, we will lodge an application with the High Court to have a provisional curator appointed. This person will be recommended by us and will serve on a provisional basis while the public is given time to comment or oppose the curators appointment on a permanent basis,” says Caroline da Silva, DEO of Financial Advisory and Intermediaries Services (FAIS) at the FSB.

George Papadakis is still a curator of Fidentia and the FSB is aware of the allegations linking Papadakis to the allegations surrounding Seedat. “Because curators are appointed by the courts, it will have to consider how to respond to Papadakis should the allegations be proven to be true. The FSB is exercising its duties and will continue to oversee the curators and will closely monitor developments so that it can respond appropriately,” says Da Silva.

Are we blaming the wrong party?

If the investigation into the actions of Seedat prove to be true, the FSB can hardly be blamed for Seedat’s actions and it simply cannot be viewed as a corrupt organisation. One bad apple does not spoil the whole barrel, especially if the barrel had no influence on the apple becoming bad.

The FSB also has no absolute control over the actions of curators and they cannot be blamed for them participating in corrupt activities, should it be proven that this was the case with Gihwala and Papadakis.

Editor’s Thoughts:
Even if the FSB has distanced itself from Seedat and Gihwala, the public will still cast a sceptical eye on the company and ask questions. How can the FSB change this perception? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts


Added by Plaintosee, 25 Jul 2014
When one looks at the name of the website:, it is clear that the FSB is a company. The officers working for FSB generally come from the financial industry, probably mainly corporations.

Corporations have never been known to put honesty, transparency, ethics first. Corporations have always existed to first and foremost make profits and increase their revenue stream.

Whether it makes profits by stealing off others, including ransacking pension funds, lying, killing, being unethical; it really does not matter. PROFIT IS KING.

This profit motive of corporations allows them to have Carte Blanche-with other's money. It is not unusual, in Western countries, that government and corporations are cosy bed partners and look after each other. There has NEVER EVER been impoverished people at the Helm of Corporations. There has NEVER EVER been impoverished people at the helm of GOVERNMENTS. One wonders, many times, in fact, if there is any difference between governments and corporations.

Both governments and corporations have been known to impoverish people -HISTORY IS AWASHED WITH EXAMPLES. Law after law is put in place to ensure that the government can rip resources, including financial resources, out of the hands of people that live from hand to mouth, paycheck to paycheck and often goes hungry long before the next paycheck is due. The pension legislation in South Africa and Western countries around the globe is a prime example of this. The stripping of ordinary people's pension funds to the tune of Billions and then, RETURNING A PITIFUL sum to the ordinary people is no SURPRISE. The actuary firms and the tracking companies have behind their names, same as the FSB. We may be duped to think that they are different, but they are not.

A Telecom CEO once said: CEOs Lie, Corporations lie. Here name was Theresa Gattung. CEOs are free people, although they lie. Peter Ghavalas was the architect and mastermind behind the the Billion Dollar Pension Stripping in South Africa. He is a free man, although he and his many friends, partners and business associates stole.

Today, governments and .co's, continue to push for LEGALIZATION of pension contributions, using the LAW to force the last bit of funds out of individuals who are struggling to make a living, and then to LORD over them for their OWN funds.
They hit people where it hurts most-their pockets, until people are on their knees, and eventually, have to steal to make a living. And then, something amazing happens. Rather than sending corporations or their fraudulent masterminds and co-conspirators and cover uppers to jail, the police, yes, the police arrests a person for stealing ONE LOAF of BREAD. The judge sends that person to 12 YEAR BEHIND BARS. It is not the corporates, not these billion dollar fraudsters, not their alleys, the FSB who are over represented in Jail: Peter Ghavalas is free to not only OPEN his own company, his, but has FREEDOM OF MOVEMENT, without a CRIMINAL RECORD, to MOVE ACROSS THE GLOBE AS HE WISHES. Those who were partners in crime,the thieves and the fraudsters, HAVE MOVED ON TO BIGGER AND BETTER POSITIONS IN CORPORATIONS. The FSB, drawn from the very same corporate world, will continue to proudly announce that only a drop of the Billions, stolen from those struggling to make a living, will be returned.

The rest, you guessed right, with the help of the government and the FSB, will again grace the pockets of the CORPORATIONS!!

Welcome to Westernization, JUSTICE IN THE WESTERN WORLD, where CORPORATE FRAUDSTERS, THIEVES, will continue to suck the ordinary people dry...

Welcome to the DEVELOPED WORLD. As Nelson Mandela said : "THEY ALL CAME IN THE SAME BOAT!

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Added by vusi, 14 Jul 2014
My comment I but provendnt fund and benefits and previous fund mum shi past away now plz help 181me fsb
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Added by Craig A, 14 Jul 2014
Give them some credit. They are not always slow off the mark! I have already received my reminder about the annual fees. Seems like this is the best department at the FSB. Btw, when i went there recently, i saw that they had free condoms in the gents loo (honestly, they did). I felt so relieved knowing that they are practicing safe sex when they screw us.
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Added by Fergus sings the blues, 14 Jul 2014
How does the FSB change this perception?

Virtually impossible if they continue to be slothful to act in respect of matters where they should have. The FSB is swift to paste, lather and swamp the finance industry with crippling legislation, which is done without too much care for its consequences, but cry foul when the shoe is on the other foot?

Pot. Kettle. Black.
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Added by Bond, 14 Jul 2014
The FSB Failed to take action in this instance as well going as far back as 2006 when the late journalist Deon Basson exposed wrongdoings within the comapny .
What is happening to this case ?

A family member of Sharemax with the surname of Goosen was working for the FSB's enforcement department. This was exposed by Journalist as well .
Why does it take a journalist to expose all this ,before action is taken !
Arthur Brown had about 192 charges laid against him of which only 9 were instituted for the court case !
Something within our judicial system is not right. . There are more wrong's than right !

FSB soothes worried Sharemax investors after Frontier warning

October 28 2013 at 08:00am
By Roy Cokayne

Comment on this story
BR Sahremax 182

Independent Newspapers

The Villa was a Sharemax mall development. Frontier Asset Management is the successor to Sharemax. Photo: Simphiwe Mbokazi

Johannesburg - The Financial Services Board (FSB) has stepped in to calm the fears of investors in Sharemax Investments after Frontier Asset Management seemingly tried to intimidate them into not lodging complaints against their financial advisers.

Frontier Asset Management is the successor to Sharemax Investments and has some common directors, including Dominique Haese, the former financial director of Sharemax and now chief executive of Frontier Asset Management.

Haese is also the chief executive of Nova Property Group, an entity established through a restructuring of Sharemax.

The FSB said on Friday it found it necessary to comment on a circular issued in August by Frontier to debenture holders and shareholders who had acquired their rights in terms of schemes of arrangement involving Sharemax companies.

In the letter, signed by Haese, investors were warned that should they persist in seeking repayment of their investments in Sharemax via the Financial Advisory and Intermediary Services (FAIS) ombud, they “may have chosen to abandon and repudiate” their interests in Nova.

Haese also claimed that Sharemax Investments “ceased its business activities relating to the erstwhile Sharemax Group during or about July 2010 and never had, does not have and never will have anything to do with the Nova Group”.

The FSB said the circular may be read as suggesting the FAIS ombud no longer had jurisdiction to deal with complaints of former Sharemax investors not only against the Sharemax companies themselves but also against their directors or functionaries.

In addition, the FSB said the circular suggested that pursuing claims through the offices of the FAIS ombud may be interpreted as these claimants having abandoned and repudiated their claims arising from the schemes of arrangement.

The FSB warned that views on these issues were still subject to adjudication by the FSB Appeal Board and, until this had been decided on, it advised investors to consult their legal representatives before taking a decision on the matter.

It added that a number of determinations by the FAIS ombud had been made against Sharemax, persons or entities associated with it and independent intermediaries who had advised their clients to invest in the Sharemax product.

“Many of these determinations have been taken on appeal to the FSB Appeal Board, where they are still pending. In one such instance the chairman of the appeal board has granted leave to appeal.

“The FSB is trying its best to have this appeal heard as soon as possible. However, nothing prevents any former investor in Sharemax from lodging a complaint with the FAIS ombud against any party considered to be liable for any loss suffered,” it said.

Frontier directors proposed the scheme of arrangement to debenture holders and shareholders after Sharemax collapsed in August 2011, after an investigation by the registrar of banks found its funding model contravened the Banks Act. This led to new investments drying up.

About 40 000 investors invested about R4.5 billion in the various schemes promoted by Sharemax, which was placed under statutory management by the registrar of banks with the managers given a mandate to manage the repayment of funds obtained by Sharemax in contravention of the Banks Act or to seek legal alternatives.

The schemes of arrangement involving Sharemax companies were sanctioned by the high court in January despite the 2010 finding by a registrar of banks investigation.

The registrar of banks only laid criminal charges against Sharemax in March last year.

The Hawks confirmed last October that it was investigating allegations that Sharemax had committed fraud. - Business Report

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Added by Eligos, 14 Jul 2014
Thank you, Mr Bond.

Let's see if there is any response to a matter that many fear has been swept under the carpet.
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Added by Mike R, 14 Jul 2014
The lunatics are running the asylum.....
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Added by Bond, 14 Jul 2014
Waar daar "n Rokie trek is daar "n vuurtjie" The rot always starts from the top ! Jackie Selebi and Company is a good example !

Treasury backs financial regulator against corruption charges
Treasury backs financial regulator against corruption charges
Finance minister Pravin Gordhan has come to the defence of the Financial Services Board, as the financial regulator faces a furious onslaught from embittered businessmen it has labelled as crooks.
Image: Gallo
Finance Minister Pravin Gordhan
" Claims were part of a campaign under way to deliberately and publicly smear the Financial Services Board...

Criminal charges of corruption were laid in recent weeks in Durbanville against FSB boss Dube Tshidi and four of his staff by J Arthur Brown, the former CEO of Fidentia.

Brown has already met with Hawks investigators, and is stepping up pressure on the FSB after complaining to Public Protector Thuli Madonsela about the regulator last month.

Separately, new claims that Tshidi's officials acted improperly have emerged from Brown's main accuser, Rudi Bam, and from Simon Nash, a businessman accused by the FSB of stealing pension cash.

But on Friday, Gordhan's department said these claims were part of a "campaign under way to deliberately and publicly smear the FSB".

Treasury said it "rejects the accusations and insinuations made against the integrity of [Tshidi] and the FSB", especially as it came from people like Brown and Nash, who both "face very serious charges".

Fidentia was placed under curatorship in February 2007 after the FSB said it found looting to the tune of R1.9-billion, which some reports called stealing from widows and orphans.

Though Brown was arrested in March 2007 on 192 charges of fraud, the final charge sheet in June 2010 contained nine charges - which will be tested in court next year.

In Brown's 100-page complaint, he accuses Tshidi and his officials of fraud, corruption, criminal defamation against him, and perjury.

Brown says the FSB "misrepresented the financial position of the Fidentia group in order to substantiate a curatorship application".

He claims the FSB "concealed dubious transactions which they entered into (with) the curators", benefited financially by selling Fidentia's assets and that Tshidi lied under oath.

Tshidi, however, says he is "not at all" concerned, calling it simply a case of those accused of corruption turning up the heat on their accusers with trumped-up allegations.

"What they're trying to do is make the FSB lose focus, and begin acting unprofessionally. They want to throw mud, but we won't do that, we'll continue to behave professionally," he said.

Tshidi says any actions the FSB took were "not an abuse of power, but the exercising of regulatory responsibility".

Separately, Tshidi is facing claims that he acted improperly from Simon Nash, a former trustee of the Cadac pension fund, who was arrested in 2006 along with Peter Ghavalas and others for stripping cash out of company pension funds.

While six people including Ghavalas have already pleaded guilty to this, Nash continues to fight. His criminal case is back in court in November.

Nash labelled the FSB's actions in manipulating curatorships as a "disgrace", saying it dragged out the Cadac pension case to bully him into settling.

In particular, Nash has taken aim at Tshidi and Tony Mostert, a lawyer who was appointed curator of the Cadac fund by the court at the FSB's request.

Also at the FSB's request, the high court appointed Mostert as the curator of all the pension funds said to have been illegally stripped of surplus funds.

In January, Nash's lawyers wrote to Gordhan saying there was evidence that Tshidi "may have committed a crime in the execution of his duties".

Nash referred to an incident in January in the Johannesburg Regional Court during his criminal trial when Tshidi was called as a witness. Tshidi was asked if he didn't see a conflict of interest in supporting Mostert's application to be curator of the Cadac Fund, as Mostert was also the curator of another fund claiming money from Cadac.

Tshidi replied that he "prefers to remain silent" as the answer might incriminate him.

Nash wrote to Gordhan that because of this answer, he believed Tshidi "should be placed under immediate suspension".

Of this claim, Tshidi says "there is no merit in what certain parties wish to infer from my evidence".

But he said he couldn't pre-empt "what I may still say, or what will be argued on behalf of the FSB" at Nash's hearing.

Mostert dismisses Nash's claims. "Those tasked with enforcing the law and appointed by courts to take control of hijacked pension funds are often the victims of vilification themselves by the very hijackers (they have) cornered," he says.

Other new accusations against the FSB come from former Fidentia director Rudi Bam - who is no friend of Brown's.

Bam says he blew the whistle on Fidentia by alerting the FSB to Brown's fraud in September 2005, sparking the curatorship.

But when Fidentia's curators asked Bam to repay R8.5-million, he complained to Cape judge president John Hlope.

In one letter to Hlope on April 16, Bam says "the dishonesty (on the part of the FSB and curators) makes Brown look like Snow White".

This week, Bam said "before Fidentia blew up, the FSB played the ostrich and did nothing. Now the curators are doing what they want, and the FSB are again ignoring the abuse".
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