Trevor Manuel has come out in support of the Financial Services Board (FSB) following various reports in the media which raised questions about the body responsible for regulating the financial services industry.
A number of serious allegations were levelled at the FSB, including corruption, maladministration and nepotism.
Quoted in an article in the Sunday Times, 18 February 2007, Manual said, "I have concluded that the allegations do not have much foundation." Manual also said that parliament's portfolio committee on finance had assured him that they were not currently investigating any allegations against the FSB.
A smear-campaign designed to undermine
Rob Barrow, Chief Executive Officer of the FSB, was also quick to deny the original claims. He suggests the source of the original article should be questioned in view of the recent investigations and court activity of the FSB.
Barrow stressed that regulations were in place to ensure that FSB staff did not have conflicting business interests outside the FSB. All FSB employees have to disclose their business interests and shareholdings in other companies on an annual basis.
He also responded to allegations that the FSB was battling with outdated IT systems and infrastructure:
"Our information technology systems are not outdated. We operate a comprehensive suite of workflow systems and use Microsoft Office systems or other applications. We are in the process of formulation a long-term IT strategy to ensure that our systems remain relevant to user requirements in the longer term."
In July 2005, claims that certain senior FSB managers were taking kickbacks emerged. Barrow said the case was found to have no substance after the FSB completed its own internal investigation. The matter was again raised by way of an anonymous tip-off in October 2006. Barrow says that the FSB's independent auditors are investigating the fresh claims, and that action will be taken if their report confirms any wrongdoing.
Fidentia chairman also takes aim
Chairman of Fidentia, Arthur Brown, also launched an attack on the FSB. He claims the FSB had no grounds to apply to the High Court to have the company placed in the care of curators.
His claims were immediately dismissed by way of a press release, in which the FSB states, "the Financial Services Board reiterates that based on the information in its possession, which mainly emanated from an extensive inspection into the affairs of Fidentias licensed investment management company, there was every justification for the FSB to have applied to court for a provisional order placing Fidentia's financial services business into curatorship."
The financial services industry watchdog seems to be doing its job. Brown's complaints appear to be little more than an attempt to pass the blame for Fidentias financial collapse to someone else. And the more serious allegations can hopefully be dismissed in light of the FSB's current course of legal action.
Editor's thoughts:
The FSB has a duty to all the players in the financial services industry. Regulation of the industry sets standards for Financial Services Providers and offers protection to the end consumer of financial products. Wed love to hear your comments on the matter. Send an email to gareth@fanews.co.za.
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