The Competition Appeal Court on Friday heard closing arguments from three banks challenging a Competition Tribunal order to grant the Sekunjalo Group an interim order against closing its bank accounts.
The three banks that made submissions are Mercantile Bank Ltd, a division of Capitec Bank Ltd; Access Bank Ltd; and Standard Bank of South Africa Ltd.
This follows the September 2022 granting of interim relief to the Sekunjalo Group, preventing the three banks from closing the group’s bank accounts and ordering five other banks to reopen accounts that had been closed.
At the time, the Sekunjalo Group argued that the banks’ closing the group’s accounts, or refusing to provide banking and payment services, constituted an abuse of dominance; collusion; and coordinated conduct that lessened competition in contravention of the Competition Act.
The six other banks are Nedbank Ltd; Absa Bank Ltd; First Rand Bank Ltd; Sasfin Bank Ltd; Bidvest Bank Ltd and Investec Bank Ltd.
Access Bank and Mercantile Bank, in their submissions on Thursday last week, the first day of the appeal hearing, argued the interim relief did not apply to them as the banks had forex trading accounts with the Sekunjalo Group companies in question, not day-to-day transactional accounts.
The banks said they only refused onboarding new accounts from the Sekunjalo Group.
On Friday, the second and final day of the Competition Appeal Court sitting, Sekunjalo’s representative, Ngwako Maenetje SC, started proceedings and said Sekunjalo had submitted to the court that a case for interference by the Tribunal had not been made with the banks’ appeal.
"The first point we make is the court must ask itself, did the Tribunal apply the correct principles to the facts? And we submit that it did," Maenetje said.
Maenetje said that on parallel behaviour, the Tribunal had found an infringement because the explanations the banks provided were not adequate.
He said Sekunjalo would not know what the bank's incentives were for them to collude.
"It (Sekunjalo) speculates that there is some kind of agenda to unbank [sic] it. They (the banks) say that's wrong. It's not. There's no agenda to unbank you (Sekunjalo). It is because there is a regulatory and reputational risk for continuing to do business with you.
"We (the banks) are refusing to onboard new customers and we're terminating bank accounts. And in that context, a Tribunal such as this court is required to assess whether that explanation is plausible. It's convincing. If it is not convincing, and there is no other clear explanation that is put up. We submit there is absolutely nothing wrong in the Tribunal drawing up prima facie that there is the indication of consultation," he said.
He said Access Bank had said Sekunjalo's business (Afrinat) was clean and there was no reason for it to be aligning itself with the other banks.
Maenetje said there was something wrong with the statement that Access Bank had made, that it didn't know that Afrinat was part of the Sekunjalo Group of companies.
"The bank must have done its due diligence to find that the business was clean," he said.
Maenetje said the banks were not treating entities consistently. He said when it came to the competition question, all entities should be treated the same.
"You would be dealing with EOH, who admitted fraud and corruption. You will be dealing with Steinhoff, which has caused most of us here to lose our earnings. You will deal with them when you apply your risk analysis consistently.
"That is not a convincing explanation for purposes of the Competition Act when your contract exhibits a level of alignment and coordination prima facie, whether there was direct or indirect contact is a matter, which the commission will either confirm in its investigation and would say it doesn't exist".
He questioned the banks’ statements that they applied the same rules to the Sekunjalo Group that they apply to other entities.
In Mercantile Bank's closing, represented by Greta Engelbrecht, she said the relief sought in respect of the Health Systems Technology account could not be granted.
"The concession must be read in context because Mr Maenatje says the relief that was sought was also to maintain all accounts that were still open.
"But the problem for him is that in respect of Mercantile Bank, the only allegation made in the founding papers was that it had closed accounts. There was no allegation that they would open accounts in the founding papers and, therefore, no allegation that could be relied on for relief that accounts remain open," Engelbrecht said.
She said the relief in respect of Mercantile could never have been that the accounts remained open because in the Sekunjalo Group's version, there was no such an account, and this made up no case in respect of Mercantile.
In his closing argument, Arnold Subel, representing Access Bank, said that regarding discrimination there was no evidence of Access Bank doing so.
"Mercantile and we are in a similar position, where there is no evidence whatsoever of any discrimination about any entity," he said.
Advocate Steven Budlender SC, representing Standard Bank, said Standard had never said the Sekunjalo Group of companies were clean.
"My clients said there are serious problems, and when you go and read those questions, they are careful, thoughtful questions about serious problems of corporate governance and money flows.
"In respect of my client, there's been no showing that this was just a smokescreen or some irrelevance. So, I submit that at least in respect of my client, there is not the slightest showing that they acted in a concerted manner in this way and that their case doesn't get it to go anywhere," he said.
Judgement was reserved.
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