South African Communist Party Central Committee statement
30 June 2014
The SACP notes that former curator of failed investment company Fidentia, Dines Gihwala, quit directorship and curator posts on Thursday and handed over his resignation to the FSB. This followed after the Western Cape High Court characterised Gihwala as a delinquent director, and declared him in a ruling as unfit to serve on any company`s board. The Court found that Gihwala and his associate, both shareholders and directors of a company by the name of Seena Marena Investments, had "recklessly" breached their fiduciary duties to the company`s offshore shareholder company called Grancy Property. The Court, which also found that there was gross abuse of directors` positions, ordered Gihwala to pay about R6 million to a former business associate. The findings and ruling have serious implications not only to Gihwala, who is a lawyer, but in our view also to the Financial Services Board (FSB), which has a crucial role to play in the process relating to the appointment of curators.
The Court`s findings and ruling could actually be a tip of the iceberg on the many aspects relating to the functions of the FSB. The SACP calls for thoroughgoing investigation into this matter, including the possibilities and the extent to which the FSB could be under the influence of a few predatory players in the financial sector and rendered toothless. The SACP will intensify its Financial Sector Campaign to achieve overhaul transformation in this sector and make it to serve the people. Among others this must involve the repositioning of institutions such as the FSB to discard any indifference towards the workers and the poor and become vigorous in pursuit of their interest and plight in relation to the financial system and matters affecting them.
In terms of the FSB Act, 1998 (Section 13(3)), FSB`s Executive Officer and Deputy Executive Officers - also being `Registrars` according to various regulatory legislations - may perform functions entrusted upon them by or in terms of the FSB Act or any other enabling regulatory legislation, for the purposes of enforcing legislation applicable to institutions whose business it is to receive, administer and control money or savings entrusted upon them by the general public.
Following the Financial Institutions (Protection of Funds) Act, 2001 (Section 5), the FSB Registrars as such are responsible, on good cause shown, to apply to a division of the High Court having jurisdiction for the appointment of a curator to take control of, and to manage the whole or any part of, the business of a financial institution. Curators are appointed by the Court, and as such their services are not falling within the ambit of procurement by the FSB. However, the FSB through its Registrars is expected to recommend to the Court a suitably qualified and experienced persons for consideration and appointment by the Court as curators, taking into account professionals with solid grounding and expertise in litigation, financial accounting or forensic investigation skills. This includes suitably qualified attorneys and advocates, chartered accountants and forensic accountants, and auditors, who, upon successful proposals for consideration as curators, are then registered on the FSB`s pre-approved Panel of Curators.
Issued by SACP Central Committee
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