Urgent application to stop FSCA making senior appointments

Written by Ciaran Ryan. Posted in Journalism

Open Secrets and the Unpaid Benefits Committee want the public involved in appointments to help speed up the refund of an estimated R51bn in unclaimed pensions and benefits. From Moneyweb.

The finance minister’s decision ‘to conduct the appointment process under a veil of secrecy’ is being challenged. Image: Moneyweb

The finance minister’s decision ‘to conduct the appointment process under a veil of secrecy’ is being challenged. Image: Moneyweb

Open Secrets and the Unpaid Benefits Committee (UBC) are asking the Pretoria High Court to halt Finance Minister Tito Mboweni from appointing a commissioner and deputy commissioner at the Financial Sector Conduct Authority (FSCA) until public involvement is guaranteed.

“We have asked the court to interdict the shortlisting, interviewing and selection of candidates – as directed by Minister of Finance, Tito Mboweni – until public participation has been provided for, to allow members of the public as well the media to have full access to these processes,” say Open Secrets and UBC in a statement.

“We believe this is essential to protect the constitutional imperatives of openness, transparency and accountability and the right of the public to participate in these processes.

“The minister is opposing the application.”

The case relates to an estimated R51 billion in unclaimed pensions and benefits owed to about four million South Africans and former workers living in neighbouring countries.

Read: How unclaimed retirement benefits can be put to better use

Pension fund whistleblower Rosemary Hunter, a former deputy registrar of pension funds at the Financial Services Board (now called the FSCA), waged a multi-year campaign within the FSB to force an open and transparent investigation into the cancellation of thousands of pension funds that still had unclaimed funds in them. She took her case all the way to the Constitutional Court, but lost her case in 2017 on the grounds that the FSCA had already launched investigations into the cancelled pension funds.

Read: What was the real issue in Hunter’s pension funds case?

Open Secrets investigator Michael Marchant says questions remain as to who owns the roughly R51 billion in unclaimed benefits. “We think it is vital to have public participation in the appointment of a new commissioner and deputy commissioner at the FSCA, as this will give greater comfort to the public that their interests are being properly served, especially those who are owed pensions and other benefits.”

Open Secrets and UBC say they have been trying for 18 months to get an answer from Mboweni on the appointment process, including an explanation for the excessive delays in these crucial appointments. They have urged the minister to make proper provision for public access and participation in the process.

“Minister Mboweni has to date never responded, other than sending an acknowledgement of receipt showing a disregard for efforts by civil society who have pressed for stability and leadership with integrity at this key regulatory body,” says the statement.

‘Dismayed’

The applicants in the case say they were dismayed to find that a year after the appointments should have been made, National Treasury announced a new shortlisting panel and “the appointments would go ahead without proper public participation – effectively in secret”.

To speed up the appointment process, Mboweni amended the regulations, but with no provision for media and public participation or scrutiny of the process.

Open Secrets and UBC say it is important that these positions are filled as a matter of urgency, however, for the appointment process to be fair and transparent, the public must have access to this process.

“Secretive, rushed appointments could do great harm, as we have seen in some of the appointments made in instances of state capture.”

Mboweni and the chair of the FSCA Selection Committee – both of whom are cited as respondents in the case – have given notice of intention to defend, though have yet to file an answering affidavit.

Open Secrets and UBC are asking the court:

  • To put a halt to the appointment process until public participation has been provided for, and for any scheduled interviews to be made public;
  • Alternatively, to ensure that the media and public be granted access to the interviewing of shortlisted candidates;
  • To declare as unlawful and set aside the minister’s decision to conduct the appointment process under a veil of secrecy, without any public participation or oversight; and
  • To order that the appointment process must continue in a transparent manner with the appointment process thus far being declared as unlawful and set aside.

“We are concerned about the FSCA appointments for reasons that go beyond the pensions industry,” says Marchant.

“The FSCA will be crucial in ensuring that customers of banks, insurance companies, pension fund administrators and other financial institutions are treated fairly and have their interests protected.”

Open Secrets is a non-profit organisation that investigates and exposes corporate economic crimes and human rights abuses. The UBC is a coalition of groups of former workers, community organisations, advice offices, non-governmental organisations and individual activists campaigning for the payment of unclaimed pension and other benefits held by the private sector.

Ciaran Ryan

The Writer's Room is a curated by Ciaran Ryan, who has written on South African affairs for Sunday Times, Mail & Guardian, Financial Mail, Finweek, Noseweek, The Daily Telegraph, Forbes, USA Today, Acts Online and Lewrockwell.com, among others. In between he manages a gold mining operation in Ghana, and previously worked in Congo. Most of his time is spent in the lovely city of Joburg.