The South African Federation of Trade Unions (Saftu), Injenje YabeNguni, National Freedom Party (NFP) and the African People’s Convention (APC) have welcomed a ruling by the Competition Tribunal preventing three major banks from closing bank accounts belonging to the Sekunjalo Group, and called on the government to protect black businesses.
In an interim ruling on Friday, the tribunal granted relief against nine banks – Nedbank, Absa, First Rand, Sasfin, Access Bank, Standard Bank, Mercantile, Bidvest, and Investec – and also ordered the reopening of bank accounts that had already been closed.
The Sekunjalo Group had taken the matter before the Competition Tribunal to ask for an interim order prohibiting the closure of their existing bank accounts against nine banks, ahead of its Equality Court case regarding racial profiling and discrimination against the Group by South Africa’s banking fraternity.
Saftu national spokesperson Trevor Shaku said the trade federation union was pleased that the tribunal did not find the reasons provided by the banks to be sufficient in the case. “The banks had cited reputational risk as the reason for severing ties, and we as Saftu had previously rejected this reason as utterly hypocritical.
“As a federation, we are happy that the Tribunal ruled against the banks albeit temporarily, and argued along the lines we argued.
“The tribunal said: ‘The undisputed and non-speculative fact before us is that a number of other companies have been implicated in serious allegations of misconduct such as alleged state capture and serious allegations of corruption.
“Concrete evidence of consistency in approach by the respondents in relation to reputational risk would have given their stated case more weight. In other words, this means the banks are inconsistent and hypocritical, and apply their rules, attitude, and morality selectively,” he said.
Shaku argued that the banks were implicated in manipulating the rand/US dollar pairing in the foreign exchange market between 2007 and 2013. “If they want to close the Sekunjalo Group accounts, then the South African Reserve Bank must also close their accounts.”
Reacting to the ruling, the spokesperson for Injenje YabeNguni Council, which campaigns for Zulu nationalism, Indunankulu Phumlani kaMfeka, said the council was grateful that the tribunal was still a just and fair institution that appeared not to have been compromised.
“The white-owned banking cartel in South Africa has indeed used its monopoly of the financial services sector to target companies owned and managed by Africans, and has been done unabated before Sekunjalo challenged this … racially biased practice.
“We thus will be observing attentively whether the racist banking cartel adheres to the ruling of the Competition Tribunal. However, we do believe that the banks need a harsher and even punitive sanction,” Indunankulu Mfeka said.
APC (the Africa People’s Convention) leader and former chairperson of the parliamentary Standing Committee on Public Accounts (Scopa) Themba Godi said his party welcomed the ruling and stated that it was long overdue as banks had acted with impunity and in a co-ordinated manner.
“The banks in South Africa act as a cartel, protected by certain people in the National Treasury and the Reserve Bank. The banks admitted guilt of manipulating the rand, to the detriment of the economy and the poor, but no firm action was taken for this treasonous act.
“The APC has consistently called for the Post Office to be given a full commercial licence, reduce barriers to blacks, with a progressive and developmental agenda, to open banks,” he said.
Godi asserted that the African people remained victims of racism that permeated every aspect of society, irrespective of whether they were security guards or university professors.
The same sentiments were expressed by the NFP (National Freedom Party), which said that the lack of consistency and the collusive role being played by the banks was unfortunate. “There have been instances where banks have not closed bank accounts of those found guilty of money laundering or unlawful financial activities.
“We think that government has a responsibility to protect businesses unless if found guilty by the legitimate financial regulators in this country, the state more protect companies from abusive elements by the banks,” said NFP spokesperson Ahmed Munzoor Shaik Emam.
Shaik Emam said there was no doubt that black-owned businesses, when compared to white-owned entities, were the targets of banks closing their accounts. He felt that the lack of consistency should be dealt with by the government.
The interim relief by the tribunal will subsist for a period of six months pending the conclusion of an investigation by the Competition Commission into a complaint regarding restrictive practices filed by the Sekunjalo Group against the banks.
In response to the ruling, Sekunjalo Group chairman Dr Iqbal Survé said it had been a challenging period for the company, but remained positive that the outcome was a step in the right direction for the company.
“This order by the tribunal is also important for financial institutions and their systems that need to be supportive of transformation, which will help to open the economy and include more competition. It is time that the abuse of power of these oligopolies and their anti-competitive conduct be prevented and that they face their reckoning,” Survé said.
This is the second positive outcome for Sekunjalo following a decision handed down by Western Cape High Court Judge Mokgoatji Dolamo, who granted an interim order in the Equality Court preventing Nedbank from closing its bank accounts.