High Court dismisses FSCA bid to supervise MEPF General Meeting

 

December 11, 2025

Dear Members

Akani Retirement Fund Administrators (Akani) and the Municipal Employees Pension Fund (MEPF) have been vindicated by the ruling made by the Johannesburg High Court, which dismissed with costs, the Financial Sector Conduct Authority’s (FSCA) overbearing and unjustified bid to interfere with the General Meeting of the members of the MEPF on 11 December 2025. It should be noted that the FSCA made unfounded allegations of irregularities concerning the governance and administration of MEPF as a cover to launch supervisory intervention at the December 11 General Meeting. The FSCA had also requested that the MEPF produce certain overbearing information, deeming this to be necessary to assess the position of the Fund.

The MEPF, its Principal Officer and Akani Retirement Fund Administrators were cited as first, second and third respondents respectively in the litigation initiated by the FSCA in the Johannesburg High Court. The MEPF argued in court that the FSCA had acted outside the scope of its statutory powers.

It argued from the beginning and in good faith that the decisions that the FSCA were seeking - including onsite supervisory inspection and attendance at the General Meeting and the availing of unredacted returns from employer municipalities electing representatives to the Board of Trustees of the MEPF – were irrational, disproportionate and procedurally unfair.

The Fund had provided redacted information to the FSCA to protect personal information of member representatives and in compliance with the Protection of Personal Information Act. In addition, the MEPF further argued that the unredacted information it provided to the FSCA as per its request was necessary to maintain electoral integrity at the General Meeting, uphold the representatives' statutory rights, and to ensure that any disclosures remained within the strict bounds of the FSCA's statutory authority.

In the ruling handed down on 10 December, Mahona AJ ruled that the FSCA must act within the bounds of its statutory powers and in accordance with the requirements of administrative justice. The ruling is important in ensuring that regulators do not have overbearing and undue influence and interference in the Fund’s procedural processes.

The judgement by the Johannesburg High Court reads in part: “The FSCA did not demonstrate that unredacted municipal returns were reasonably necessary for the performance of its supervisory functions, nor did it show that the concerns it identified could not be addressed through less intrusive means. The section 131 decision therefore lacked the jurisdictional foundation required by the statute and was neither rational nor procedurally fair.” This is a crucial ruling that not only does it ensure that the FSCA as a regulator acts responsibly and within the law but also holds it to account. We accept and respect the regulatory role played by the FSCA in the retirement and investment industry but we also want it to not be both referee and player in the discharge of its mandate.

Although the FSCA is entitled to ensuring trustees of MEPF are properly elected and that the board is lawfully constituted as stipulated by law, it still needs to meet jurisdictional requirements that the specific information sought is reasonably necessary for the statutory purpose identified. In this case, the court ruled that this was not the case. The MEPF is pleased to inform members that the 11 December general meeting will now proceed without the undue glare of the FSCA. The High Court clearly stated that the general meeting is imminent, with the FSCA barred from interfering with the meeting forthwith.

The Fund's governing rules clearly stipulate that representatives of the Fund’s members must meet to elect the Board of Trustees every three years. Furthermore, the court ruled that the FSCA did not prove any of its allegations which made it require unredacted returns from municipalities.

For the avoidance of doubt, the Court ruled that the FSCA “did not demonstrate that unredacted returns were reasonably necessary for supervisory purposes, nor did it articulate a factual basis capable of sustaining the extraordinary step of conducting an on-site inspection” of the general meeting.

The Court summarily ruled that although the FSCA has broad powers to regulate and supervise pension funds in South Africa, these powers must be exercised lawfully, rationally, and proportionately.

Additionally, the regulator’s attempt to inspect the Fund’s General Meeting was found to be procedurally unfair, based on irrelevant or undisclosed allegations, and lacking the factual basis required by the FSR Act. In the end, FSCA decisions and actions were thus reviewed and set aside, with the Court ordering the FSCA to pay the Fund’s legal costs.

We now look forward to concluding the General Meeting and to successfully hold the election of a new board of trustees. Further information regarding the outcome of the elections and of the General Meeting will be released in due course.