BUSINESS TIMES SUNDAY TIMES FEBRUARY 18 2007

Allegations against FSB an obvious smear campaign

WITH reference to the story “Watchdog fingered for poor governance” (Business Times, February 11), Parliament’s Portfolio Committee on Finance is not conducting any investigation into the affairs of the Financial Services Board.

The office of the Pension Funds Adjudicator is not “part of the FSB”.

The office of the adjudicator is independent of the FSB but reports to the FSB from an
administrative perspective. The FSB collects levies from pensions funds to fund the costs of the adjudicator’s office.

No senior staff member of the FSB travelled to Cape Town on Thursday last week. If certain people did travel to Cape Town they would have been of a relatively junior level and would not have been knowledgeable on the affairs of the FSB.

The allegation about an investigation into a senior manager for taking kickbacks from suppliers obviously relates to an incident in July 2005 which was investigated internally at the time and was found to have no substance.

The issue was again reported to the FSB via an anonymous tip-off in October 2006. To obtain certainty, our internal auditors, who are an independent firm of chartered accountants, were instructed earlier this year to investigate the matter fully.

We are awaiting a report. If the report indicates that there is any substance to the allegations we will have no hesitation in dealing with the matter in an appropriate manner.

Neither I nor senior management have any knowledge of “members of the FSB” having external business interests other than any interest which could have no effect on their employment at the FSB.

All staff of the FSB are required to disclose all outside interests in any business or undertaking, including shareholdings, on an annual basis.

If any of these interests could give rise to any form of conflict of interest with the FSB, they would be required to disengage.

The conditions of labour laws are strictly adhered to and we have comprehensive processes in place to ensure that this is the case.

Our information technology systems are not outdated. We operate a comprehensive suite of workflow systems and utilise Microsoft Office systems or other applications.

We are in the process of formulating a long-term IT strategy to ensure that our systems remain relevant to user requirements in the longer term.

I have no knowledge of any serious incident where information has been leaked from our offices during my tenure as executive officer other than what you claim of three staff members in your article.

If we become aware that any of the institutions under our supervision is not compliant with SA Revenue Services requirements we report the matter immediately.

I have reason to believe that the information provided to your newspaper was orchestrated by someone from an institution which recently was subjected to regulatory action by the FSB.

It is unfortunate that a newspaper of your standing has allowed itself to be used in what is clearly a smear campaign and which undermines the integrity of an institution such as the Financial Services Board.

You could not have confirmed that the Parliamentary Portfolio Committee was investigating the FSB or have met our employees, which was the main thrust of your article. It is obvious that you have acted irresponsibly.

— RJG Barrow, executive officer, Financial Services Board

•Barrow provided comment when we published the original article. We print this letter to provide him the opportunity to expand his response.

— Business Times Editor