Bid to block om­bud’s rul­ings is post­poned

Weekend Argus (Saturday Edition) - - GOODDRINKING - BRUCE CAMERON

An ur­gent High Court ap­pli­ca­tion to pre­vent Nol­untu Bam, the Om­bud for Fi­nan­cial Ser­vices Providers, from is­su­ing de­ter­mi­na­tions on com­plaints against a Gaut­eng-based fi­nan­cial ad­viser, Deeb Risk, who ad­vised mainly pen­sion­ers to put their money into im­plod­ing Share­max prop­erty syn­di­ca­tions, has been post­poned un­til next year.

Risk, on the le­gal ad­vice and with the fi­nan­cial back­ing of a San­tam-owned in­sur­ance com­pany, Stalker, Hutchi­son and Ad­mi­ral (SHA), gave no­tice of the ur­gent ap­pli­ca­tion last week of their in­ten­tion to stop Bam hear­ing com­plaints with im­me­di­ate ef­fect.

SHA, which has pro­vided Risk and his com­pany with pro­fes­sional in­dem­nity in­sur­ance, in­stead of sup­port­ing Risk in re­pay­ing ill-ad­vised pen­sion­ers, has sought to halt Bam in her tracks from pro­tect­ing con­sumers.

Risk, with the sup­port of the San­tam sub­sidiary, lodged an ap­pli­ca­tion ear­lier last month to stop Bam from is­su­ing de­ter­mi­na­tions, ar­gu­ing that the mat­ters should be re­ferred to the High Court.

This move, Bam said last week, would nul­lify the ad­van­tages of her of­fice for con­sumers, who would gen­er­ally not be able to af­ford to go to the High Court to take on in­sur­ance com­pa­nies with ex­ten­sive cash and le­gal re­sources. She said many of the com­plainants were pen­sion­ers who had lost a large por­tion of their as­sets.

The ur­gent ap­pli­ca­tion was made when Bam con­tin­ued to is­sue de­ter­mi­na­tions against Risk, de­spite a non-ur­gent ap­pli­ca­tion to block her in her tracks and, in ef­fect, nul­lify the of­fice of the om­bud.

The of­fice was es­tab­lished in terms of the Fi­nan­cial Ad­vi­sory and In­ter­me­di­ary Ser­vices Act to give con­sumers cheap and easy ac­cess to com­pen­sa­tion when il­lad­vised on their in­vest­ments.

By last week, when the ur­gent ap­pli­ca­tion was launched, Bam had is­sued two de­ter­mi­na­tions against Risk and his com­pany, D Risk In­sur­ance Con­sul­tants, or­der­ing them to re­pay R1.2 mil­lion plus in­ter­est to a 72-year-old wid­owed pen­sioner, Elise Barnes.

This week she is­sued a third de­ter­mi­na­tion against Risk and his com­pany. She or­dered them to re­pay R780 000 to an 82-year-old pen­sioner, Margery Sal­mond, whom Risk ad­vised to place her sav­ings into a Share­max prop­erty syn­di­ca­tion.

Risk earned a com­mis­sion of at least R46 800 (six per­cent) from the in­vest­ment, which he did not dis­close to Sal­mond, ac­cord­ing to Bam’s de­ter­mi­na­tion.

How­ever both Sal­mond and Barnes may have to wait a bit longer for their money. Agree­ment was reached be­tween the le­gal teams of Risk and the om­bud that the ur­gent ap­pli­ca­tion will be held over un­til next year.

In the mean­time, the om­bud will not send her de­ter­mi­na­tions to the High Court un­til the new court date.

Once the de­ter­mi­na­tions are sent to the High Court they, in ef­fect, be­come an or­der of the court from that date. A 30-day clock then starts tick­ing for any ap­peal to be lodged against the de­ter­mi­na­tion with the Fi­nan­cial Ser­vices Ap­peal Board.

Bam says she will con­tinue to make de­ter­mi­na­tions in com­plaints from six oth­ers against Risk.

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