Pretoria - South Africa’s Major banks failed to demonstrate there was any irreparable harm to their businesses when asked why they cannot restore Sekunjalo Investment Holdings (SIH) and its related entities’ (Sekunjalo Group) closed banking facilities, or refrain from terminating any others.
Instead, they relied on “ill-conceived reputational risk” as the reason for closing these accounts.
This was the argument put forward by Sekunjalo’s legal representative, advocate Vuyani Ngalwana SC, during the conclusion of the two-day hearing into collusion brought by the group at the Competition Tribunal.
SIH and 35 other applicants made an urgent application seeking interim relief to have their banking facilities restored and prevent their other accounts from being closed. The respondents were Access Bank, Nedbank, Investec Bank, Sasfin Bank, Absa Bank, First National Bank, Mercantile Bank and Bidvest.
Ngalwana rubbished Standard Bank’s claims that the applicant never responded to its questions, and as a result, prevented the bank from not being able “to do its due diligence as it was supposed to do”. Sekunjalo Group Company accounts with Standard Bank are under review.
He said the version put forward by Standard Bank was “not correct”, after he consulted with his clients on Monday. He said Sekunjalo’s reply was contained in an 18-page affidavit by Dr Iqbal Survé to the tribunal, but it was rejected by the respondents owing to late submission. Ngalwana nevertheless raised the points in his reply.
Tribunal members said they would deliberate on the matter.
Ngalwana said Sekunjalo “plays a big role in the maintenance of the right to freedom of speech, which includes freedom of the media, the press and the constitutional democracy”.
“Absa said we are asking the tribunal to do too much. We are asking no such thing. We are asking for the Competition Act to be read through the prism of the Constitution,” Ngalwana said.
Absa’s legal representative, advocate Michelle le Roux, suggested that the application of interim relief was beyond the bounds of the tribunal.
“When Absa closed the accounts, it said it acted unilaterally and that there was no scarcity of accounts. We say that is not the answer to the collusion charge. All it demonstrates is that Absa was the first to trigger the guillotine,” Ngalwana said.
The banks were asked by tribunal members to opine on the possibility of an order that they must reinstate banking accounts of Sekunjalo-related entities.
Advocate Greta Engelbrecht SC, representing Mercantile Bank Limited, said: “If the banks were to restore or if they were to allow banking transactions, they can’t do so on the mere order of the tribunal. They would have to first go through the regulatory steps and first have to receive the information that is required.”
Engelbrecht said the banks would subsequently have “to assess that information and then make a unilateral decision on whether or not they should be providing those services.
“The point is in law, if they came to the conclusion that they didn’t wish to take on that risk in line with their obligation under Fica, for example, they could justifiably decline to open, restore bank accounts and to continue rendering services,” she said.
Sasfin Bank’s legal representative, advocate Luke Kelly, said the restoration of banking facilities would require the bank to put “certain things in place that it doesn’t have already (and) at great cost”.
Kelly also said the bank would have to put in place other terms to manage its risk. “So, it would not be competent to simply order terms that prevailed prior to the closure of the accounts and simply reinstate them as they were then,” he said.
All the banks denied that they colluded to get rid of Sekunjalo, saying there was “no incentive for banks to collude to get rid of a client”.
The ruling by the tribunal in the matter was reserved.
Pretoria News