Pather v Financial Services Board

The Directorate of Market Abuse investigated Maslamony Pather, CEO of Ah-Vest Limited, and the company itself for alleged contraventions of s 76 of the Securities Services Act 36 of 2004 relating to false and misleading financial statements and fictitious credit sales. The Enforcement Committee found, on a balance of probabilities, that Pather authorised and participated in manipulating the company’s accounting records and imposed substantial administrative penalties on both appellants. The decisions were confirmed on appeal by the Board of Appeal. The appellants then sought review in the High Court, arguing that the Enforcement Committee lacked jurisdiction, applied the wrong standard of proof, and that the relevant statutory provisions were unconstitutional. The High Court dismissed the application, and the matter came before the Supreme Court of Appeal.

The appeal was dismissed with costs, including the costs of two counsel.

The case authoritatively clarifies that Enforcement Committee proceedings under South African financial markets legislation are administrative and civil, confirming that administrative penalties do not amount to criminal punishment. It reinforces the legitimacy of the financial regulatory enforcement framework and the applicability of the civil standard of proof in such proceedings.