Fin24.com reported on Wednesday that on September 19 2008, the Financial Services Board (FSB) had declined to issue FutureFin with a licence after receiving an application from the company in July 2007.
Both Wesbank and FutureFin told Fin24.com they did not believe FutureFin needed to be licensed as a financial services provider; because FutureFin Finance (the division of Wesbank) was trading under regulatory approval from Wesbank, the division was correctly licensed.
"We had forgotten we even applied," said Zunaid Moti, a director of FutureFin Finance's holding company Abalengani and the claimed original developer of the FutureFin structured finance product, who added that he had first heard about the licence being declined when Fin24.com reported it on Wednesday.
FutureFin Finance became a division of Wesbank in 2006. The division offered lifestyle-conscious consumers the opportunity to drive luxury motor vehicles at a cost of R2 900 per month per million rand.
Chris de Kock, Wesbank's sales and marketing director, said that the partnership had been terminated at the end of August 2008. According to Wesbank, the agreement was ended due to insufficient sales volumes; FutureFin was generating around R10m-R15m per month in sales for Wesbank.
Moti said that FutureFin had made an intentional breach of the contractual relationship between the parties to get out of the relationship, as the company felt it was not receiving the necessary support from Wesbank.
Regarding the split from Wesbank, Ashruf Kaka, the CEO of Abalengani, says: "The clients of FutureFin are the single-most important element of this business and we feel that the level of service they deserve can only be delivered if FutureFin is an entity unto itself.
"Although we have been successful in our joint ventures with financial institutions, the FutureFin vision and ethos can only be upheld through ownership of the entire process from start to finish."
Wesbank offering similar product
Moti said that when the joint venture was terminated, Wesbank would no longer offer the structured finance product that was being marketed by the FutureFin Finance division.
However, his ire was raised when he found that Aston Martin was promoting a similar product through Wesbank.
De Kock defended the offering, saying that individuals or businesses cannot own a proprietary structured finance agreement. He said that the FutreFin structure was not unique, and that Wesbank had offered similar products before entering into the joint venture with FutureFin.
"We continue to offer the structure financial products through Aston Martin and probably another 40 dealerships," said de Kock.
Moti said that FutureFin has a binding legal agreement that prevents Wesbank from offering such a structure. "The proof is in the pudding," said Moti. "Wesbank wouldn't have entered into the joint venture with us if they'd originally had the structure and the market share."
In a written statement, Kaka said that the "FutureFin product itself will only be made available in the future if the company chooses to re-enter the market at a later stage".
- Fin24.com