Court bid to halt new FSCA head’s appointment

Some two-and-a-half years after the Financial Services Conduct Authority (FSCA) was established, national treasury this September announced the process of appointing a commissioner and four deputies to head up the industry watchdog was finally underway.

But a high court bid to have that process – which civil society groups have described as being shrouded in a “veil of secrecy” – declared unlawful, could end up putting things on ice a little longer.

Open Secrets and the Unpaid Benefits Campaign – represented by the Centre for Applied Legal Studies at the University of Witwatersrand – have taken finance minister Tito Mboweni to court in the hopes of halting the process, pending a review of the regulations that govern it.

At present, the regulations only provide for public participation once a panel has shortlisted, interviewed and recommended candidates for the positions in question. Open Secrets and the Unpaid Benefit Campaign want the entire process to be open to the public.

Their application – which Mboweni is opposing – came before the North Gauteng High Court on Wednesday.

In the founding papers, Michael Marchant – a researcher at Open Secrets – said as the oversight body for the financial services sector, the FSCA’s conduct had “far-reaching consequences for ordinary citizens”.

“The independence and transparency of the FSCA is a crucial safeguard of its ability to act in the public interest, despite pressure from a powerful and well-resourced business sector,” Marchant said – adding a closed-door appointment process tainted that independence.

“The public has a right to know how and when the minister has selected the individuals he will appoint as commissioner and deputy commissioner of the FSCA as these are individuals who will be entrusted with the mammoth task of policing big business and keeping it accountable,” Marchant went on.

He also pointed to the “indigent and vulnerable members of society” whom the FSCA was tasked with protecting.

“It is therefore incumbent on the minister to undertake meaningful engagement with these individuals or at least their representatives, in the process of appointing the persons to captain the ship that is the FSCA,” Marchant said.

But in court, Ngwako Hamilton Maenetje SC, for the minister, said the appointment process could not be delayed any longer.

“There is a leadership vacuum that requires filling at the FSCA and it is in the public interest that this be done sooner rather than later,” Maenetje argued.

He argued that appointments to statutory or public institutions did not always have to follow a public process.

“Where the constitution or legislation requires such a public process, suitable provisions are set out. It is not the case here,” he said.

He said while the interviews would indeed be “private,” this did not render the process “secret” or “unlawful”.

“It is not a unique process. A similar one was recently followed for the appointment of the commissioner of the South African Revenue Services,” he added.

And he said in any case, the panel was in the process of shortlisting candidates at present and was hoping to publish the names of its recommended candidates either later this month or in early December – when the public would have an opportunity to weigh in.

Maenetje was adamant the panel operated in an “open, transparent and accountable” way.

“It is just one that is different to how they [Open Secrets and the Unpaid Benefits Campaign] want the process to unfold.

But that does not render it “secret” or constitutionally impermissible,” he said.

Judgment was reserved.

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