CAPE TOWN - As the much-anticipated court case against some of the country’s banks got under way at the Equality Court in the Western Cape, on Thursday, several hundred aggrieved citizens, marched on the court buildings with slogans denouncing “racist” banks in support of the case.
The proceedings were, however, delayed due to “technical points around jurisdiction” being raised by Nedbank after the courts had closed on Wednesday night and in their delivering of the papers to the presiding judge on the morning of the matter.
While legal representatives in the case were locked in the judge’s chamber (Judge M I Samela), for hours, hundreds of people gathered outside the court opposing the banking fraternity’s decision, to unilaterally close banking accounts belonging to the Sekunjalo Group of Companies.
The Equality Court case has been brought against several of South Africa’s leading banks including ABSA, First National Bank, Nedbank, Investec, Sasfin, Mercantile Bank, among others.
The banks claimed they suffered reputational damage in banking accounts associated to Sekunjalo Investment Holdings Chairman, Dr Iqbal Survé, and allied companies within the Group.
These banks have all cited negative media articles, and allegations contained in the Judicial Commission of Enquiry into Allegations of Impropriety at the Public Investment Corporation Report, as their reasons for terminating the transactional banking facilities of these companies and certain individuals.
The Mpati commission of inquiry report has recently come under scrutiny by former Judge Willem Heath, who confirmed in a privately commission review of the report, that there was no case against Sekunjalo and no evidence to support the Mpati commission’s conclusions.
At the centre of the Equality Court case, is whether the South African banking fraternity infringed on the rights of the Sekunjalo Group of Companies when they closed the black-owned companies’ banking accounts, with some refusing to offer new facilities, naming “reputational risk” as the block in continuing any relationship with the Group.
Sekunjalo instructing attorney, Ashley Adriaans from Adriaans Attorneys said: “technical points around jurisdiction, were only raised on Wednesday, and we have not had an opportunity to consider the jurisdiction point.
“The judge raised that point in chambers with our counsel (on Thursday) morning, but this was not raised in Nedbank’s papers before.
“We obviously need time to prepare where the whole matter can be argued.”
Nedbank gave some of the companies in the group until February 15, others February 22 and March 15, to find alternative banking measures.
For others, the guillotine is set to fall in May.
Sekunjalo, in their heads of argument, said they had approached the Equality Court on an urgent basis to stop the bank from closing certain accounts.
This is until certain applicants have joined in the main proceedings instituted in the Equality Court against Nedbank, on the grounds of unfair racial discrimination and harassment, and until the complaint in the main proceedings has been finally determined.
“In light of the uniform manner with which the banks have been terminating the applicants’ banking facilities one after the other, the applicants are of the view that the banks in South Africa – in particular the five biggest banks, which include Nedbank – are engaging in a concerted strategy to shut the Sekunjalo Group out from freely participating in economic activity…
“This is evident from the discriminatory manner in which the banks appear to weigh the reputational risk that customers pose to them.
“To demonstrate this discrimination, the applicants have referred to a number of companies (white companies) that have been found guilty of financial fraud and financial misconduct, but yet, have not had their banking facilities terminated by the banks, including Nedbank,” says Sekunjalo’s heads of argument.
“According to Nedbank, its reasons for retaining the white companies as customers, include the fact that these entities have been restructured and acknowledged past wrongdoing and/or that remedial actions, such as payments to affected parties, have been made…
“In light of these authorities, read with Nedbank’s admission that it treats the applicants differently from the white companies, we respectfully submit that the applicants have established a prima facie case of discrimination and Nedbank has failed to discharge the onus to establish that the discrimination is not based on race.”
However, Nedbank claims that Sekunjalo’s allegation that they have acted in a racist manner is an: “unfounded and unsubstantiated allegation.”
“For a number of years, the Sekunjalo Group has been the subject of widespread allegations of improper and unlawful conduct…
“The allegations levelled against the Sekunjalo Group, and the findings made against it by the Mpati commission, create substantial reputational risk for Nedbank.
“Reputational risk arises if individuals or the public generally form a negative perception of Nedbank because of something Nedbank is involved in or someone Nedbank is associated with,” Nedbank submitted in their heads of argument.
Former Judge Willem Heath was privately commissioned to conduct a review of the Mapti commission report.
This review report was released earlier this week in which Heath has rebutted and debunked several of the findings made by the Commission.
Cape Times