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By Nomthandazo Nkambule | 2024-10-22
THE Financial Services Regulatory Authority (FSRA) has described the recent appointment of a parliamentary select committee tasked to review the forensic report tabled in parliament by Minister of Finance Neal Rijkenberg on how the erstwhile investment entity, Ecsponent swindled millions of emalangeni from unsuspecting investors as a crucial step towards solving the debacle.
FSRA Chief Executive Officer Ncamiso T Ntshalintshali said the parliamentary select committee would play a vital role in the resolution of the Ecsponent issue.
“The FSRA welcomes this development, as it reaffirms all concerned authorities’ commitment towards facilitating a thorough and impartial investigation into the matter. We will extend our utmost support to ensure a thorough and impartial process," Ntshalintshali stated, emphasising the importance of transparency in this endeavor.
This development comes hot on the heels of a shocking revelation made by Ntshalintshali recently in court, where he alleged that Ecsponent, now known as ESWIG, never invested the funds it collected from investors.
This statement, ostensibly, has sent ripples of concern through the financial community and has sparked outrage among the many investors who trusted ESWIG with their hard-earned money.
Ntshalintshali had suggested that the then Ecsponent operated as a pyramid scheme, exploiting unsuspecting investors while promising lucrative returns.
The situation has been further complicated by claims that former FSRA CEO Sandile ‘Chief’ Dlamini is alleged to have been compromised by the promoters of the scheme. Ntshalintshali pointed out that he could not comment on the role alleged to be played by Mr. Dlamini as the matter is still to be tested in court.
Ntshalintshali described the allegations against Ecsponent as heartless and evil, stating that the firm’s conduct was beyond acceptable compliance standards. Ntshalintshali conveyed the FSRA's deep concern regarding such anomalies.
"Protecting consumers and ensuring transparency in financial operations are at the core of our mandate," he stated. He emphasised that any misconduct allegations were taken seriously, expressing concerns when market participants fail to adhere to strict market conduct standards as espoused in legislation.
As part of its commitment to transparency and accountability, the CEO said the FSRA has initiated remedial measures to address these issues and ensure that the integrity of the financial system is guarded.
Such accountability measures were crucial in restoring trust in the regulatory framework and ensuring that those responsible for permitting or enabling fraudulent activities are held accountable, he said.
Ntshalintshali said his organisation was not in any position to challenge the outcome of the report presented to parliament by Minister Rijkenberg, as it was a culmination of an independent investigation wherein the FSRA was also part of the investigated entities.
Moving forward, Ntshalintshali said the FSRA was implementing significant reforms aimed at enhancing consumer protection and market integrity.
Collaborating with the International Monetary Fund (IMF) through the Financial Sector Stability Review, the FSRA is actively pursuing regulatory reforms that will address deficiencies identified in the non-bank financial services sector.
Ntshalintshali mentioned the establishment of specialised departments focused on prudential analysis, market conduct, and enforcement.
These measures are designed to bolster consumer protection and enhance the regulatory framework, ensuring that high-risk areas receive appropriate attention and resources.
“As the FSRA adapts to the evolving financial landscape, it has established a dedicated Market Conduct Department, which aims to ensure fair treatment of consumers by licensed financial service providers.
This new department will promote transparency, helping consumers make informed decisions about their investments,” he explained.
Through enhanced risk assessment, consumer education initiatives, and stringent enforcement measures, the FSRA is diligently working to create a resilient financial system that better protects investors from fraudulent schemes like those associated with Ecsponent.
While the ongoing court proceedings prevent a full discussion of the merits of this case, Ntshalintshali said the FSRA was determined to shield Emaswati investors from being further victimised by the very entity that perpetrated this alleged gross fraud.
“The commitment to accountability, transparency, and consumer protection demonstrates a new era of reform in the financial landscape of Eswatini, aiming to safeguard the interests of investors and restore confidence in the system,” he said.
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