Unions, business organisations and political parties have slammed the decision of First National Bank (FNB) to shut down the accounts of AYO Technologies.
Unions, business organisations and political parties have slammed the decision of First National Bank (FNB) to shut down the accounts of AYO Technologies.

Bank’s move on AYO ’political meddling’, say unions, political parties

By Ntombi Nkosi, Samkelo Mtshali Time of article published Apr 18, 2021

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Johannesburg - Unions, business organisations and political parties have slammed the decision of First National Bank (FNB) to shut down the accounts of AYO Technologies, and accused the country’s big four banks of being players in the country’s factional politics, rather than protecting jobs.

In an announcement on Thursday, AYO Technologies informed its shareholders that the company was given notice by FNB of the closure of its transactional accounts and that it had launched legal proceedings against the bank.

“Despite the company’s best efforts, FNB has not provided AYO with what it regards as valid reasons for termination. The company believes that it is entitled to fair treatment and as a result, the company has instituted legal proceedings against FNB for its decision to close the company’s transactional banking facility,” read the statement.

AYO has said in court papers that FNB’s decision would lead to more than 1 200 job losses.

Cosatu spokesperson Sizwe Pamla said they disagreed with the arrangement of banks where they have unchecked powers.

“We disagree with the arrangement where banks have unchecked powers. Companies are not only made of shareholders, there are other stakeholders like workers and service providers who are affected by this reckless behaviour.

“Banks need to be accountable and explain their reasons and should also engage with relevant regulators and state institutions to make their case and ask for an intervention where laws have been broken.

“We need an assertive state, including a robust parliament and regulatory institutions to temper the unlimited power of big banks,” said Pamla.

Communication Workers Union (CWU) general-secretary Aubrey Tshabalala called for FNB to reverse its decision against workers, which it said was tantamount to economic treason.

“The banks must not play an active political role which has a potential in future to hold the country to ransom. While acknowledging the independence of the private institutions like banks, we are concerned that banks in a way become a referee and the player at the same.

“The unilateral decision by FNB to close the accounts of AYO has a negative impact on hundreds of workers,” said Tshabalala.

SACP spokesperson Alex Mashilo said South Africa needs financial sector transformation to de-monopolise the banking sector, among others, and to diversify the industry.

“If following good governance protocols and ethics, accounts are closed to clamp down on corrupt activities, then that is reasonable. A clear and fair process should prevail, in that case, with all whom it may concern given the right information and the right to respond in a credible law enforcement process.

“Abuse of power, monopoly and dominance in the financial sector would be problematic, if that is what is at play. This, too, should be investigated and dealt with if it is the case. Beyond all this, South Africa needs financial sector transformation,” said Mashilo.

UDM leader Bantu Holomisa said that banks just closed accounts and did not care about the consequences to holders of accounts.

“Something must be said publicly and the only way of doing that, of knowing, would be to challenge these people publicly in a court of law. The owner must tell of this ill-treatment, that he was not even warned and they just closed, but if it’s in court we’ll get all the details,” Holomisa said.

African Transformation Movement president Vuyo Zungula, said: “If you didn’t know, we are in Apartheid 2.0, check how banks close certain accounts at will. How we still have apartheid legislation that hasn’t been transformed to speak to the present day realities and empower the previous and currently disadvantaged black majority."

The Black Business Chamber (BBC) also slammed FNB’s decision for its closure of AYO’s banking accounts without providing reasons to the company.

“The BBC is disappointed and angry at the actions of First National Bank (FNB) to close AYO’s banking account. This is even more disturbing, when according to the statement from AYO, FNB provided no reasons for the closure of its accounts,” the organisation said.

Nadiah Maharaj, FNB’s chief risk officer, said: "FNB can confirm it has given reasonable notice to terminate its banking services to the client concerned. Due to the confidential nature of our client relationships, we cannot provide any further details on the matter.”

Absa spokesperson Songezo Zibi said: "We do not comment on clients past, present or future clients. All things that pertain to clients are communicated with clients. We do not discuss clients."

The ANC did not respond to requests for comment by the time of publication.

Political Bureau

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