An Old Mutual financial advisor fleeced hundreds of thousands of rands from clients and had the gall to challenge his debarment by the FSCA. Picture: Karen Sandison / Independent Newspapers
The Financial Sector Conduct Authority (FSCA) has denied a former Old Mutual financial advisor’s petition to overturn his debarment.
Lesiba Bethuel Phaho was accused of stealing several clients' savings and appealed to the Financial Services Tribunal (FST) to reconsider his debarment by the FSCA for a period of five years, with effect from November 14, 2022.
The FST noted this week that the application had been dismissed and the decision to debar him was in fact correct.
The disgraced Old Mutual employee was found to have misappropriated money from three of his clients, according to a forensic report by the financial institution.
Phaho was employed by Old Mutual SA from January 2005 to April 2021.
His main responsibility was selling Old Mutual Financial products to prospective clients and introducing various financial products to them.
According to the FSCA, Phaho’s first theft was in 2014 whereby he invested R100,000 for a “Ms L” legitimately but then requested her to invest another R50,000 which she did.
Phaho pocketed the R50,000 and never invested the money. The client then checked on her policies some time late and found that only R100,000 was invested with Old Mutual.
She contacted Phaho and he then undertook to pay back the unaccounted R50,000 in instalments.
He paid R5,000 in May 2020 and another R5,000 in September 2022. The applicant still owes her R40,000.
“On the second occasion a ”Ms N“ invested an amount of R400,000 with Old Mutual. She invested R300,000 with Old Mutual via a transfer from her bank account. She then gave Phaho another R100,000 in cash for him to invest with Old Mutual,” according to the FSCA.
He promised her that he would refund her in April 2021, but failed to do so.
On the third occasion, a “Ms M” retired in February 2017. Phaho advised her to invest all her pension money with Old Mutual.
She, however, refused but invested R300,000 for a period of five years, which at maturity would yield a value of R418,000.
“He then advised her to transfer the money into his personal account and not Old Mutual’s. When the client asked him why, he said he wanted to deal with the investment swiftly, and for him to do that she had to pay the money into his account. She transferred an amount of R340,000 into the applicant’s account so that the funds could be invested with Old Mutual. This amount was never invested with Old Mutual.”
The total Phaho stole from these clients comes to R490,000.
It seems he used his faith to persuade his clients or victims rather that he was a pastor and in fact kept a bible on his table.
"Ms N stated in her affidavit that she trusted Phaho because he was a priest.
Ms M stated that she trusted him because he was an advisor and thought he would not lie to her.
"He had a bible on his table and always spoke about his faith. I had no reason not to trust him,” she said.
Old Mutual told News24 that it had opened a criminal case against Phaho in March 2022 and that the case is still under investigation.
The financial institution also said that it had compensated the three affected clients and was fact investigating two more complaints against Phaho.
IOL Business has reached out to Old Mutual for further information on this matter.
IOL BUSINESS