The Sekunjalo Group's battle against major banks reveals a deeply troubling pattern of collusion. The hearing held for an extension to a previously granted interim interdict heard before the Competition Tribunal (the Tribunal) last week, has laid bare the co-ordinated effort of several prominent banks to close the transactional facilities of Sekunjalo Group.
Extension to the Tribunal’s original relief order granted on September 16, 2022, became necessary with FNB’s sudden termination of accounts.
It should be noted that the terms of the interim relief and its subsequent extension to March this year, state that the order would remain in force for six months or the conclusion of the investigation into Sekunjalo’s claims against the banks or whichever came first.
Since the investigation had not concluded by March this year, the interim relief was extended for a further six months.
The investigation has still not reached finality – in part, due to the reluctance of the banks to provide the requested information to allow the process to unfold, but this has not stopped several of the banks from leaping to terminate and oppose Sekunjalo’s request for a further extension.
Concerns about the fairness and transparency of South Africa's banking sector were heightened after these courtroom proceedings, which unfolded on October 5, 2023, and which have laid bare how the banks involved, including Standard Bank, First National Bank, Absa, Access Bank, Mercantile Bank, and Nedbank, appear to have meticulously orchestrated their defence strategies, with advocate for Mercantile Bank, Greta Engelbrecht, also setting the grounds for the hearing on behalf of all the other banks concerned.
This bears an eerie resemblance to the systematic, sequential closure of the Sekunjalo Group's various company bank accounts, indicating a premeditated, co-ordinated campaign – a textbook example of collusion.
The banks' defence, built on the premise of 'reputational risk,' also continues to raise eyebrows, which is somewhat hypocritical given that by their very actions, the banks are drawing more attention to themselves than had they just left Sekunjalo to go about their usual business – which, it must be pointed out, have not transgressed any laws whatsoever.
Politicians across the spectrum have expressed their dismay at the banks' actions. Sibusiso Mncwabe of the African Transformation Movement questioned the criteria used by banks to target specific companies without law enforcement involvement. Julius Malema, leader of the EFF, condemned Standard Bank's decision to close Independent Media’s accounts, hinting at mobilising public action against such banks. The National Freedom Party called for transparency, emphasising the threat to media freedom and democratic principles.
Leading financial experts, including Redge Nkosi and Dr Ferdinand Niyimbanira, have criticised banks for their subjectivity and racial bias in applying the 'reputational risk' rule. They underscored the urgent need for objectivity and fair conduct within the banking sector. Dr Eduard Toerien has also shed light on the banks' rationale, highlighting the critical importance of ethical decision-making.
As Sekunjalo’s legal battle unfolds, it carries the weight of reshaping the financial landscape and holding those involved accountable. South Africans, along with the rest of the world, watch keenly as the truth behind this now obvious collusion comes to light, sparking a conversation about ethical banking practices and the need for a just, transparent financial system.
South Africa stands at a crossroads – one that demands a thorough examination of the nation's financial institutions. The Sekunjalo affair is more than just a legal case; it's a call to action for a banking industry that must uphold the values of justice, equality, and ethical conduct, ensuring a level playing field for all businesses and citizens, enshrined in our Constitution and the globally recognised principle of reasonableness.
Adri Senekal de Wet is the executive editor of Business Report.