The Financial Services Tribunal has dismissed Junaid Ebrahim Salejee's application for reconsideration, finding that he had contravened financial services regulations by canvassing and marketing investments offered by Acqumen Fund Limited, which was not authorised to operate as a financial services provider. Salejee, a chartered accountant, had helped market the unauthorised investment scheme.
The tribunal upheld the FSCA's decision to prohibit Salejee from providing financial services for seven years, finding that his involvement in the scheme went beyond administrative duties and included engaging with prospective investors, distributing marketing material and explaining the investment product. The scheme, which began operating around September 2015, promised investors projected returns of approximately 14% annually.
According to the ruling, Acqumen Fund invited members of the public to subscribe for ordinary shares linked to debentures secured against immovable property, with a minimum investment of R10,000. Between 250 and 300 investors ultimately participated in the scheme, raising approximately R70 million in share capital for Acqumen Fund. The tribunal noted that aggregate flows through the relevant bank accounts during the period of the alleged contraventions amounted to approximately R255m.
The FSCA investigation found that Acqumen Fund and related entities were not authorised financial services providers. The authority also found that Salejee and Acqumen Fund director Mahomed Ebrahim Amod canvassed, marketed and advertised the unauthorised business in contravention of Regulation 3(a) of the Financial Advisory and Intermediary Services regulations. The alleged contraventions occurred between September 15, 2015, and November 21, 2023.
Salejee challenged the FSCA's findings, arguing that the marketing and advising were undertaken by other individuals, including the scheme's sales representative, Ridwaan Adam, and Amod. However, the tribunal found that Salejee had attended meetings with prospective investors, distributed Acqumen Fund's prospectus and marketing material, explained the investment product and admitted that he had dealt directly with some clients.
The tribunal also considered Salejee's involvement in a 2016 application for Acqumen Management Services to register as a financial services provider. The then Financial Services Board advised in March 2017 that the application should instead be made in Acqumen Fund's name because the fund dealt directly with clients. The tribunal found that Salejee was aware of the licensing issue and had been professionally involved in the application process.
The tribunal concluded that the seven-year debarment was reasonable and that there was no basis for further reducing the sanction. The application for reconsideration was dismissed.
Key points
- The Financial Services Tribunal has upheld a seven-year ban on accountant Junaid Ebrahim Salejee for his role in marketing an unauthorised investment scheme that raised R70 million.
- The scheme, which promised 14% annual returns, was found to be operating without authorisation from the Financial Sector Conduct Authority.
- Salejee's involvement in the scheme went beyond administrative duties and included engaging with prospective investors and distributing marketing material.
