HOW FIRST NA­TIONAL BANK RE­SPONDED

Weekend Argus (Saturday Edition) - - PERSONALFINANCE -

The of­fice of the fi­nan­cial ad­vice om­bud, Nol­untu Bam, in­vited First Na­tional Bank (FNB) to deal with its al­leged li­a­bil­ity as De Ghee’s em­ployer, but “such at­tempts came to nought”.

Bam was then com­pelled to is­sue a statu­tory rul­ing call­ing on the bank to fur­nish a for­mal re­sponse. The re­sponse was that De Ghee had nei­ther ac­tual nor os­ten­si­ble au­thor­ity to ren­der ad­vice to clients on fi­nan­cial and in­vest­ment op­por­tu­ni­ties. The bank con­tended that:

◆ De Ghee was act­ing out­side the course and scope of his em­ploy­ment;

◆ De Ghee was not au­tho­rised to ren­der fi­nan­cial ad­vice, as his du­ties as a branch manger in­volved the over­all man­age­ment of the branch;

◆ De Ghee acted for his own ben­e­fit and not in the bank’s in­ter­est;

◆ Kesh­war failed to prove that De Ghee acted as an agent of FNB when the scheme was pre­sented, “if there was such a scheme”;

◆ There was no in­signia, trade­mark, sym­bol or doc­u­ment pro­duced by Kesh­war that sug­gests that FNB was the bene­fac­tor of the money in­vested, and all ac­count num­bers were ei­ther in the name of De Ghee or his fam­ily mem­bers.

◆ Kesh­war failed to ques­tion the authen­tic­ity of the in­vest­ments and ac­cepted so-called in­ter­est of ap­prox­i­mately R94 000, which was paid to him within three months of mak­ing his in­vest­ment;

◆ Kesh­war must have known that he was in­vest­ing in a scam or pyra­mid scheme; and

◆ The is­sues raised in the com­plaint could only be tested un­der cross ex­am­i­na­tion in a court of law.

De­ter­mi­na­tions made by Bam have the same ef­fect as a civil judg­ment. Any de­ter­mi­na­tion can be taken on ap­peal to an ap­peal tri­bunal, but only with the leave of the om­bud.

PROB­LEM EM­PLOYEE

FNB paid five claims re­lated to De Ghee, the bank told Per­sonal Fi­nance this week.

De Ghee’s em­ploy­ment con­tract with FNB was ter­mi­nated on De­cem­ber 30, 2008 af­ter an in­ter­nal in­ves­ti­ga­tion into his con­duct, Ly­ta­nia John­son, the head of risk and com­pli­ance at FNB Re­tail, says. He was ar­rested, and in March 2012 was sen­tenced to six years’ im­pris­on­ment.

“We care­fully au­dit all of­fi­cials who of­fer in­vest­ment ad­vice to cus­tomers,” John­son says.

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