Cosatu spokesperson Sizwe Pamla said yesterday (Sun) that South Africa’s banks were taking advantage of the state’s weaknesses by behaving as a law unto themselves and arbitrarily terminating their clients’ bank accounts.
Pamla made this comment during an interview with Independent Media in which he commended the Competition Tribunal for ordering major banks to withdraw or reverse their decisions to terminate the bank accounts of Sekunjalo Investment Holdings (SIH) and its group companies, which include Independent Media.
He described the banking sector as an apartheid oligarch that was offensively opposing transformation.
“But we can be comfortable with the fact that the tribunal has corrected what is considered to be an overreach on their part,” Pamla said.
The tribunal granted the Sekunjalo Group interim relief last Friday by ordering Nedbank, Absa, Standard Bank, Mercantile and Bidvest to reopen the group’s bank accounts. It also interdicted Standard Bank, Mercantile and Bidvest from continuing to close the accounts.
This relief is set to stand until the Competition Commission concludes its investigation into numerous complaints regarding restrictive practices filed by the Sekunjalo Group against the financial institutions.
Palma condemned the state for allowing the balance of forces to favour the banks, as this “is a reminder that when the balance of forces is in favour of those who have the economic muscles, they abuse and misuse their power.”
Pamla challenged the state to use its muscle to transform the banking sector and tame these institutions.
“They (banks) feel that the state is so weak and vulnerable that they can bully the people’s representatives (Parliament) into giving in to their demands. It’s one of those things where the people’s representatives in Parliament also have to prove themselves as to where they stand on issues of transformation by taking the apartheid oligarch head on,” he said.
He also claimed that the banks had been allowed to get away with financial crimes that they had committed in the past.
“The financial sector in the country had, in the first quarter of 1996, dumped the rand as a way of just testing the backbone of the ANC. As usual, the ANC panicked. They (again) did this in 2009 and they have been doing it as a way of confronting the ANC every time they feel that they need to send a message,” he said.
He said MPs had postponed the confrontation with the banks and monopoly capital “for far too long”.
“And 30 years later we should at least get a sense that this is not a sustainable attitude and approach. It does not make them (banks) change their minds when you shy away from confronting them, it emboldens them. Maybe, at some point, the people’s representatives, and people in general, need to know that this fight was postponed but sooner or later we need to have it,” said Pamla.
Legal expert Mpumelelo Zikalala welcomed the tribunal’s ruling while condemning the banks’ actions.
“This tribunal did a very good job because we then have to say what criteria have been used to identify the accounts to be terminated. The termination of the accounts must not be an ulterior motive which is hidden and only known by the banks, and it must be something that is known by all of us,” he said.
Zikalala said the banks should provide evidence that a person or company whose account was closed had actually committed an offence.
“Just to say people are a reputational risk, yet the risk is unknown … remains a problem. I think you and I probably have been the victims where R99 is deducted from the accounts without your authority, no one closes those accounts (of the entities that do the unauthorised deductions).
“But then you target these ones (Sekunjalo and others) … and you shut down the accounts. If you take action saying you are protecting your clients, do it uniformly and openly,” Zikalala said.
Information Communication Technology Union (ICTU), which represents the majority of Independent Media’s employees, welcomed the tribunal’s ruling as “heart-warming”.
Its president, Origenous Mogoatlhe, said he believed that the decision would soon be made permanent based on the outcome of the Competition Commission’s investigation.
“There have been a whole lot of people that have been affected by this and we believe that the employees have nothing to worry about and members of society at large who have been affected have nothing to worry about.
“All these people who have been conniving in this unbanking of Sekunjalo and the other affected parties will come to pass and in as much as they are hiding behind other things, they will be coming to party and we will see who are those people,” he said.
In its ruling, the tribunal found that the Sekunjalo Group had established prima facie evidence that the banks had engaged in a practice involving a concerted refusal to supply banking services to the Sekunjalo Group amounting to a restrictive horizontal practice in terms of section 4(1)(a) of the Competition Act.
While the banks argued that the Sekunjalo Group could approach alternative banks or use third-party service providers, the tribunal said it had been established that third-party payment providers were not economic substitutes for the services provided by the banks, and that this sufficed for interim relief purposes.
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.