Sizwe Dlamini | Mwangi Githahu
SEKUNJALO Investment Holdings, in court papers against the banks of South Africa filed at the Equality Court on February 21 this year, make scathing claims about other media, accusing its detractors of grouping themselves and formulating unsubstantiated stories to discredit and tarnish Sekunjalo and the listed entities in which it has an interest – known as the Sekunjalo Group (Sekunjalo).
In their founding affidavit, Sekunjalo sets out how this has resulted in a vicious “trial by media” that has caused a ripple effect across the business of the Sekunjalo Group and related companies. It has resulted in an infringement of its right to trade, an infringement of its right to dignity and the dignity of its employees, its affiliates, stakeholders and associates, and an infringement of its right to equal protection and benefit of the law, and not to be discriminated against.
“The complainants’ position is that the banks have used their internal risk assessment to discriminate against the complainants thereby depriving the complainants of the right to equal enjoyment of their rights and freedoms.
“The banks have relied on vitriolic and inaccurate media reports published by or at the instance of the complainants’ competitors in the media space as the reason for the termination of the banking services for the complainants,” read the papers.
In today’s operating environment, it’s a prerequisite for companies to have a transactional bank account before they can begin operating.
Sekunjalo argues that the effect of the banks’ move to close their bank accounts amounts to unfair discrimination, an unjustified limitation of their right to trade, and their right to dignity. The banks’ move to have Sekunjalo companies unbanked, also infringes on the constitutional rights of all affected parties.
The country is also transitioning towards a cashless society, thanks to the effects of social distancing brought about by the Covid-19 pandemic. Transactions are now moving to electronic and digital platforms, especially for business, a fact that has not escaped the banks, who have become ever-more powerful in their control, which has forced a conflict between contract and constitutional law. Something that will be tested at the upcoming Equality Court hearing that starts today, Tuesday April 19.
Sidze Benjamin Mutheiwana and Dr Roelien Brink in their report titled, “Transitioning South Africa to a cashless economy as a developing country”, state clearly, that South Africa’s cashless economy accounts for about 35 percent of the overall transactions that are made and that South Africa, along with Nigeria, were two African countries that were moving towards a cashless economy.
“The results of the study showed a larger amount of the population was ready to transition towards a cashless economy.
“The results also indicated that security was the main concern to a larger audience, although even besides that, the usage of mobile and internet transacting among all age groups and gender was significantly high.
“The findings show that the government should pay close attention to cashless services as this may facilitate better tax compliance from all who are trading within the South African economy,” reads the report.
The action against Sekunjalo by the banks threatens more than 8 000 employees, and indirectly more than 40 000 livelihoods, and has been described by financial academics, industry commentators, among others, as an attack on transformation and human rights.
The UN Guiding Principles on Business and Human Rights, which was the first international instrument to assign companies the responsibility to respect human rights, has a top 10 Human Rights Risks for the Financial Sector.
The first of these deals with the discrimination in lending practices and reads in part: “Lending practices contain human rights risks regardless of their size or scale. Similarly, entire lending institutions may deny customers access to finance based on race, religion, or gender. As loans are increasingly approved or denied by algorithms, financial models have the potential to perpetuate, exacerbate, or mask discrimination.”
In papers filed with the Equality Court, Sekunjalo Group chairman, Iqbal Survé said the banks had a serious case to answer as they had violated the group’s constitutional rights.
He is asking the court to declare that the banks’ conduct constitutes unfair discrimination and that their decisions to close the group’s and its related entities’ bank accounts should be overturned.
Apart from these declaratory orders, Survé also wants each bank to pay damages for the financial losses incurred by the group of companies, and their related entities because of unfair discrimination and harassment by the banks.