THE Sekunjalo Group will urgently approach the Competition Tribunal in a bid to prove that the banks are abusing their dominance in the sector.
The move is to ensure empowerment and transformation, and stop abuse by South Africa’s all-powerful banking fraternity of socio-economic inequity.
Sekunjalo and its chairman, Dr Iqbal Survé, have embarked on a number of legal actions against the country’s biggest banks, most of which have severed ties with the group.
In the latest of a series of legal challenges, the group will ask the tribunal to issue interim orders to the effect that those banks which had closed the company’s bank accounts must restore them.
The banks, including Nedbank, which is in the process of closing the accounts, must be stopped, the group said. The group is applying for the interim orders pending the final outcome of a complaint it had lodged in December last year with the Competition Commission.
The commission has been asked to investigate the conduct of the banks in pulling the trigger on the powerful group and to order that they restore all banking accounts and services as their conduct, according to the group, clearly contravened the Competition Act.
Dr Survé said in an affidavit filed with the Competition Tribunal that the conduct of the banks constitutes an abuse of dominance as prohibited in the Competition Act.
He said that as a result of the anti-competitive strategy employed by the banks the applicants (the Sekunjalo Group of companies) were unable to compete in the markets in which they operate.
He stated that the conduct of the banks amounted to a group boycott.
Dr Survé said the continued survival of the applicants was dependent on Nedbank and Standard Bank at this stage, as the other banks had already severed their ties with the group. The applicants were thus pinning their hope on the Tribunal to order that the banks again do business with them pending the outcome of the larger legal battle.
“We ask for an order that those who have already terminated their services must provisionally restore them pending the final outcome of the Competition Commission’s investigation or any proceedings which may result from it.”
Dr Survé pointed out that without banking and payment services, the applicants would cease to operate, which would in turn reverse the enormous transformational gains the group has achieved over the years.
He said the conduct of the banks is plainly anti-competitive because they collectively hold 90% of the market.
“The Sekunjalo Group has been the subject of concerted and unfounded attacks over the past few years.
“The group’s unique business model to control its investments portfolio has seen it being the first black empowerment group to own and control a large online and print media group in South Africa … It has been subjected to anti-competitive and vitriolic attacks,” Dr Survé said in his affidavit.
It was pointed out in the court papers that the goals of the Competition Act included to promote employment and to advance the socio and economic welfare of South Africans.
The Sekunjalo Group had participated in the national economy for more than 26 years and was a significant player in various business and other sectors.
“These gains are on the brink of reversal, if not collapse, because of the anti-competitive conduct of the banks.”
The Sekunjalo Group is also a major player in the markets in which it operates, having three entities listed on the JSE.
Dr Survé said the banks were clearly abusing their dominance by severing ties with the group.
He said the tribunal did not need to make findings at this stage against the banks, other than ordering them to do business again with the applicants pending the outcome of the further litigation.
The banks have cited “reputation risk” or “outside of their risk appetite” as reasons for refusing to do business with the applicants.
Dr Survé said, however, that the banks, in a concentrated market, could not refuse to supply banking services due to “reputational risk.”
These irrational claims cannot outweigh the anti-competitive effects of the banks’ conduct.
“I submit the main reason for refusal to supply scarce goods and services is to invest in the extinction of the applicants. The reasons provided by the banks do not outweigh the anti-competitive effect.
“I ask the Tribunal to put an end to this type of discriminatory and abusive conduct by the banks,” Dr Survé said.
He added that Nedbank, especially, was guilty of contravening the Competition Act and pointed out that the bank, in a letter, said it would consider keeping the account of Premier Fishing open, on condition that the fishing giant severed its ties with the Sekunjalo Group.
The group said it had no alternative but to turn to the tribunal as the biggest banks, which cumulatively hold about 90% of the market, had refused to provide banking services to the applicants.
“The conduct of the banks is clearly anti-competitive and against public interest. The harm to competition and public interest in the markets in which the Sekunjalo Group operates is manifest,” he said.
Pretoria News