In a major victory for the Sekunjalo Group in its fight with South African banks, the Equality Court sitting in the Western Cape High Court has ordered the Financial Intelligence Centre (FIC) to hand over information on various banking institutions’ Risk Management and Compliance Programmes which determined their decisions to close the group’s bank accounts, as well as documents pertaining to EOH Holdings, Tongaat Hulett and others.
Judge Daniel Thulare ordered that Absa Ltd, First Rand Bank Ltd, Investec Bank Ltd, Nedbank Limited and Standard Bank of South Africa Limited issue their programmes within 20 days.
The banks were ordered to issue all reports of suspicious and unusual transactions made to the FIC by accounting institutions in respect of the applicants and all reports of suspicious and unusual transactions made to the FIC by accounting institutions in respect of Sekunjalo Investment Holdings (Pty) Ltd and the entities associated with the black-owned group.
They were also ordered to provide all reports of suspicious and unusual transactions made to the FIC by accounting institutions in respect of EOH Holdings and its subsidiaries, KPMG Services Proprietary Limited South Africa, Steinhoff International Holdings NV and Tongaat Hulett Development.
Sekunjalo is currently embroiled in a legal battle with several major South African banks over what it described as bias and racial discrimination.
It has also launched several concurrent lawsuits to support its Equality Court case.
Sekunjalo on Tuesday said the ruling reinforced its contention that all bank account closures or threats of closure, were not based on objective evidence, but rather on subjective desire under instruction.
The Group had asked the FIC on several occasions to provide it with documentary proof that the banks had complied with the Financial Intelligence Centre Act 38 of 2001 (FICA), and submitted information to FIC relating to concerns over Sekunjalo and how it conducts its business, prior to closing all its related bank accounts.
As the FIC had not been forthcoming, Sekunjalo had no option other than to compel the FIC.
Opposing the application for access to the information sought, the FIC raised several objections, including that the applicants “did not set out any factual or legal basis for entitlement to the information sought” and “had no legal right to the information”, and dubbed the relief sought as a “fishing expedition”.
However, Judge Thulare’s order stated: “The Sekunjalo Group had their banking facilities terminated on account of purported ‘reputational and business risk’, just like the applicants. The Sekunjalo Group was informed that it was due to associated negative publicity which arose from the Mpati Commission and its report. The respondent banks gave these reasons notwithstanding other entities that have variously been held guilty for inter alia fraud and corruption on a massive scale. EOH, KPMG, Steinhoff and Tongaat Hulett allegedly admitted crimes of fraud and corruption on a massive scale and had multiple criminal and civil cases pending against them.
“I find that the applicants have established their right to the information sought. Fairness and equity, and our constitutional values of openness and transparency, favour that the applicants be granted access to the reports which the respondent banks provided to the FIC as regards reputational and business risk as well as anti-bribery legal and regulatory framework. This is part of the portfolio of evidence that is material to determine whether the applicants were unfairly discriminated against, as they allege.
The disclosure of this confidential information held by the FIC will help in the proper determination of the issues in the main application.”
Sekunjalo chairman Dr Iqbal Survé described the outcome as a significant victory.
“We have maintained from the beginning that there has been no basis for any of our accounts to be closed, as there is no wrongdoing by any of our companies. The decision to close our accounts has been motivated by political interference and is tantamount to economic sabotage in an effort to destroy the country’s biggest black-owned media house, along with other Sekunjalo-owned entities.”
The latest ruling follows evidence in an interlocutory case brought by Sekunjalo, also heard in the Western Cape High Court, in which Judge Hawthorne heard from Nedbank’s counsel, that there were no records of any minutes or meetings, nor had any documents been destroyed, pertaining to any misdeeds by Sekunjalo-related entities, that would spark reporting to the FIC.
Cape Times