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High Court dismisses AH-Vest case

High Court dismisses AH-Vest case
10-04-14 / Staff Writer

High Court dismisses AH-Vest case

In a statement, the regulator said in 2009, the Enforcement Committee (EC) found that Pather and AH-Vest made false, deceptive and misleading statements in contravention of section 76(1) of the Securities Services Act, and imposed an administrative penalty of R1.5 million on both Pather and AH-Vest respectively.

Pather and AH-Vest thereafter brought a review application before the High Court in which they challenged, among others, the constitutionality of the EC proceedings and argued that because the finding of the EC is similar to a finding of criminal guilt, the EC proceedings should be proved beyond a reasonable doubt.

The review application was successfully opposed by the FSB and the court ordered Pather and AH-Vest to pay the FSB's costs including the costs of two counsel. Pather and AH-Vest have brought an application for leave to appeal against the judgment.

The FSB said among others, the court found that:

The Act provides for civil, criminal and administrative proceedings. Certain contraventions of the Act attract both criminal and administrative liability that is not mutually exclusive. This is constitutionally permissible.

The EC is an administrative body that must conform to section 33 of the constitution being just administrative action and the Promotion of Administration of Justice Act, No.3 of 2000. It is not required to be an independent forum.

Since EC proceedings are administrative in nature, a matter before the EC must be proved "on a balance of probabilities" being the civil burden of proof.

A respondent appearing before the EC is not considered an accused person and therefore not entitled to the rights conferred by the constitution on accused persons.

In the opinion of the FSB, the principles enunciated in this judgment would apply equally to other types of administrative decisions made by the FSB or Registrar.

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