Oakbay’s former pay agent not registered

Terbium Financial Services, which until recently acted as a paying agent for the Oakbay group, is not registered with the Payments Association of SA (Pasa), raising questions whether it has breached regulations governing conduct in SA’s national payments system.

Pasa, a payment system management body recognised by the Reserve Bank under its National Payment System Act, said all third-party payment providers had to be registered with it in line with a Reserve Bank directive.

The registration should be done by the payment provider’s bank, which has to be one of the 30 members of the clearing and settlement participants at the core of the act.

Business Day could find no record of Terbium on Pasa’s list of registered third-party payment providers, or even of system operators.

This was even though Terbium has been offering paying agent services, for which it takes lump-sum deposits from corporate entities to divide up among suppliers, employees and other creditors, as part of its “corpo-

rate connect” package.

In a document provided by the Bank of Baroda during Oakbay’s bid to interdict the bank from closing its accounts, Terbium MD Andre van der Zee is asking Oakbay CEO Ronica Ragavan to transfer R5.7m in order to pay 42 invoices.

These included one sent by Van der Merwe and Associates, which represents the controversial Gupta family, majority shareholders in Oakbay.

“All third-party payment providers have to be registered with Pasa by the bank of the [provider], in terms of [Reserve Bank] directive 1 of 2007,” said Pasa communications manager Leticia Mentz. “From a payment system perspective, contravention of this directive is an offence of section 12 of the NPS [National Payment System] Act.”

Section 12 states that any person who neglects, refuses or fails to comply with a directive regarding a payment system is guilty of an offence. Any person convicted of this offence is liable for a fine up to R1m or five years imprisonment, or both.

The Bank did not respond to questions from Business Day.

Van der Zee, in response to questions, said Terbium had consulted its lawyers and was advised there was some confusion about the interpretation and the terms of the act and the directive. “Terbium acted as a ‘payer service provider’ and complied with all its obligations under the NPS [National Payment System] Act and the relevant directive,” he said.

A section of the directive states that any person who regularly acts as either a beneficiary service provider or payer service provider should inform its banker of its involvement in payments to third persons who, in turn, must inform Pasa.

When this was pointed out, Van der Zee said: “What we intended to convey was that there may have been confusion as to the services provided, given the definitions of payer services provider and system operator, particularly given that the term system operator is widely defined.

“We need to speak to our internal operations people and get more clarity around the exact nature of the services provided and the communication with external parties.”

However, there is no record of Terbium on Pasa’s list of system operators either.

Terbium had not responded to questions on this by the time of publication, as it was seeking clarity on the matter.