Licence row does not stop BNP in other deals

FINANCIER and advisory firm BNP Capital’s (BNP’s) licence suspension does not prohibit the company from offering other services that are not defined under the Financial Advisory and Intermediary Services (FAIS) Act, Caroline da Silva, deputy executive officer for FAIS at the Financial Services Board (FSB), said on Wednesday.

It is a key requirement that people who offer financial services advice must pass a regulatory exam. BNP Capital’s licence was suspended after it was found that one of its advisers had not completed the exam. The adviser was not named.

The firm was appointed to help with advisory services and to restructure South African Airways’ (SAA’s) R15bn debt and to raise funding for the airline. It has been under attack for failing to disclose that its licence was suspended by the FSB when it got the SAA contract. The deal was first put on hold and later cancelled after the anomaly was discovered.

“If the business is rendering services on products not defined in FAIS — for example, lending or fund-raising or debt-restructuring, then the FAIS suspension will not impact on these as long as they do not involve any products as defined in FAIS,” said Da Silva. “FAIS only issues licences to companies or persons if they are rendering advice or intermediary services in terms of a financial product and some of these services were the offering of securities and instruments, debentures and securitised debt, money markets, collective investments and insurance,” she said.

Daniel Mahlangu, CEO of BNP Capital, said because the suspension related only to the private equity fund, it did not form part of the requirements of the transaction that it had with SAA.

“Our other areas of expertise are in corporate finance, asset management, project finance and accounting services,” said Mahlangu. “We were given three months to rectify, meaning the particular individual should write the exams. Another option made available was that we should get a financial services provider with a similar CATII licence to work in partnership with us, on condition we have funds under management.”