In the Spotlight: JSE Censure Decision Under Scrutiny

On 5 September 2023, a noteworthy legal judgement emerged from the Gauteng Division of the High Court of South Africa, situated in Johannesburg.

The case centered around an individual sanctioned by the Johannesburg Stock Exchange (“JSE”) for transgressing various provisions of the JSE’s Listing Requirements. Aggrieved by the sanction imposed, the individual applied, under section 230 of the Financial Sector Regulation Act 9 of 2017 (“FSRA”), for a reconsideration of the decision, which had to be undertaken by the Financial Services Tribunal (“the Tribunal”).

Under Section 231 of the FSRA, it is important to note that an application for reconsideration does not automatically suspend the decision sought to be reconsidered. Consequently, the individual had to apply to the Tribunal for the suspension of the JSE’s decision while it underwent reconsideration. The Tribunal opted to suspend the payment of the fine the JSE had imposed, but declined to suspend the publication of the public censure which stood to be published on the JSE’s News Website.

The Tribunal’s decision not to suspend the publication of the censure pending its reconsideration prompted the individual to apply to court to review and set aside that decision. The review was motivated by concerns that the Tribunal did not give adequate consideration to certain factors while potentially overemphasizing others. Decisions that are flawed in this respect are, in principle, reviewable under section 6 (2) (e) (iii) of the Promotion of Administrative Justice Act 3 of 2000. However, it is trite law that a reviewing court should exercise caution to avoid overturning a decision solely due to a difference in opinion. The court must remain mindful that the primary responsibility for determining the relevance of factors lies with the decision maker.

In this particular case, it was alleged that the Tribunal improperly assessed two key factors: the potential harm to the individual resulting from the censure’s publication pending its reconsideration and the individual’s likelihood of obtaining a less severe sanction from the Tribunal than the one imposed by the JSE.

The court ultimately found that neither the potential harm to the individual caused by the censure’s publication during the reconsideration process nor his chances of success upon reconsideration were evaluated in a way that undermined the decision’s rationality or its logical connection to the relevant facts. Consequently, the review application was dismissed, and the individual was ordered to pay the costs associated with the review.

Jean-Paul Rudd

Partner | Attorney

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