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AFB
AFB
Alexander Forbes Limited - Independent assessment of business practices
Alexander Forbes Limited
(Incorporated in the Republic of South Africa)
(Registration number 1958/001974/06)
Sharecode: AFB
ISIN code: ZAE000018230
("Alexander Forbes" or "the Company")
Independent assessment of business practices
Shareholders are referred to previous announcements in terms of which
shareholders were advised that the Board of Directors of Alexander Forbes
had appointed lawyers, Deneys Reitz and independent auditors, Ernst & Young
("the independent advisers") to conduct an independent assessment of
business practices of the Company"s South African operations. Shareholders
are now advised that the assessment has been completed and the Company is
now in discussion with the Financial Services Board regarding the findings
of the independent assessment. The Company will continue to cooperate
fully with the Financial Services Board in this regard. Following
completion of the independent assessment it has become necessary to
increase the general provision for potential historical exposures by R20
million.
An open letter from Group Chief Executive, Peter Moyo, to all interested
parties is reproduced below.
Sandton
20 September 2006
Sponsor:
J.P.Morgan Equities Limited
Open letter from Peter Moyo, Group Chief Executive of Alexander Forbes
Limited
To all interested parties and most of all, to our valued clients and my
colleagues:
In March this year we opened our doors to Ernst & Young and asked them to
go through every aspect of our business where we interact with clients and
to get professional advice and opinion where necessary from Deneys Reitz.
The brief was clear - review all our business practices and identify any
client facing business practices that fail to comply with all legal
requirements as well as those that fail to meet the highest standards of
corporate governance. The brief may have been straightforward but the
execution required meticulous attention to detail and I thank all Alexander
Forbes" employees who gave of their time and knowledge to help complete
this task.
We have gone through an unprecedented assessment across our three main
operations in South Africa, being Risk & Insurance Services, Financial
Services and Investment Solutions. I am pleased to report that the
assessment has been concluded and I would like to express my gratitude to
the professionals at both advisory firms for their cooperation and
diligence. Most importantly I would like to thank our loyal clients who
have stood by us, confident, I hope, in our sincere commitment to do the
right thing.
We are in discussion with the Financial Services Board regarding the
findings of the independent assessment. We will continue to cooperate
fully with them in this regard. The findings are available on our website
at www.alexanderforbes.co.za.
The assessment covered 84 business practices. The report identifies 5
practices where improvement relative to legal requirements is required and
7 practices corrected in the past or currently undergoing correction but
where the historical position potentially requires consent from or
resolution with clients. None of these positions applies to Investment
Solutions.
There is absolutely no excuse for the fact that we fell short in certain
client-facing business practices. Some of the issues are historic and had
already been addressed - others are currently being addressed and all
obligations to affected clients will be discharged.
Now that the assessment is complete we will ensure that the company
maintains the highest levels of ethics and governance and that every single
one of our business practices meets all requirements in all respects. We
also continue to cooperate with the Financial Services Board.
Alexander Forbes has always acknowledged that our customers are our
greatest asset. To further show our commitment to our customers, we have
recently launched an initiative to ensure that at every instance of dealing
with us, our customers are treated in a respectful, dignified and
transparent manner. This programme has already been rolled out in our UK
businesses as well as Investment Solutions in South Africa and will now be
extended to our other operations in South Africa.
At Alexander Forbes we recognise that we operate in a sector that requires
us to be beyond reproach. I hope and trust that our commitment to the
highest levels of corporate governance is now tangible, evident and clear
for all to see.
I firmly believe that we can now move forward with confidence knowing that
we have sound business practices in place.
Yours sincerely,
Peter Moyo
Group Chief Executive
Date: 20/09/2006 03:13:04 PM Produced by the JSE SENS Department
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