Three South African commercial banks made their submissions yesterday in the Competition Appeal Court to challenge the order made by the Competition Tribunal to grant the Sekunjalo Group an interim order against the closing of its banking accounts.
This follows the September 2022 granting of interim relief to the Sekunjalo Group, preventing the three banks from closing the group’s transactional bank accounts and ordering five others to reopen bank accounts that had already been closed.
At the time, the Sekunjalo Group argued that the banks’ conduct of closing accounts or refusing to provide banking and payment services constituted an abuse of dominance, collusion, or co-ordinated conduct, which lessened competition and was in contravention of the act.
The nine banks are Nedbank Ltd; Absa Bank Ltd; First Rand Bank Ltd; Sasfin Bank Ltd; Access Bank Ltd; Standard Bank of South Africa Ltd; Mercantile Bank Ltd, a division of Capitec Bank Ltd; Bidvest Bank Ltd; and Investec Bank Ltd.
The three banks that made their appeal submission were Mercantile Bank, Access Bank and Standard Bank. The banks seek to challenge the interim order made by the Tribunal.
In its submission, Mercantile Bank, represented by Greta Engelbrecht SC, disputed that it had closed Sekunjalo accounts. Instead, it denied the group from onboarding new accounts.
On the question of dominance, Engelbrecht said, Mercantile Bank had a market share of 1%. In order to have dominance in the market, companies needed to have a market share of at least 35%.
She said there was simply no basis to treat Mercantile as a dominant firm.
"Capitec and Mercantile are disrupters in the market. There are large and established banks in the market. Those large and established banks considered the risk too great.
Engelbrecht said in the case of Mercantile, the Tribunal gave a judgment beyond what Sekunjalo had asked for. She said some of the relief given by the Tribunal did not apply to Mercantile.
She said the allegations made by Sekunjalo were against FNB and Absa, and that Mercantile was not mentioned. She said Mercantile provided services to Health Systems Technologies, part of the Sekunjalo Group.
"Sekunjalo understood that it had only asked the bank accounts held at Standard Bank and Nedbank not to be closed. It is understood that the notice of motion is asked against Mercantile. Only that bank accounts already closed be reopened, so it couldn't ask in respect of Health Systems for relief, but the tribunal gave the order anyway," she said.
Engelbrecht said the Tribunal's judgment had an effect on how its banking system is viewed internationally.
She also argued that there was no evidence that the banks colluded in closing the accounts of Sekunjalo.
Access Bank, represented by Arnold Subel, argued that, like Mercantile Bank, some relief granted by the Tribunal did not apply to Access Bank.
Subel said the Tribunal lumped everyone in its judgment, and said it provided banking services to Afrinat, one of the companies associated with Sekunjalo, and that screening found that the Sekunjalo Group was high risk.
“Initially, Access Bank did not know that Afrinat was part of the Sekunjalo Group,” he said.
Standard Bank, represented by Steven Budlender, argued that Standard Bank was obliged to close Sekunjalo accounts as Sekunjalo didn't provide it with the necessary answers it had asked for, on time.
On behalf of the Sekunjalo Group, Vuyani Ngalwana disputed these representations, arguing that the banks had colluded against Sekunjalo as there was evidence of an email sent by an Access Bank employee to another stating that two other banks had closed Sekunjalo accounts, after which the Afrinat accounts were closed.
Ngalwana also disputed Standard Bank’s request to enter new evidence into an appeals process, arguing that the bank had had ample opportunity to raise its evidence before the Tribunal had taken place in 2022.
He also referred the bank’s legal counsel and the court to the fact that the order had been extended to September 15, 2023 and that investigation into the matter had also been extended to December this year.
The hearing continues.
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