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Former Fedusa chief and former DDG join Iqbal Survé in banks battle

Former deputy director-general at the Department of Agriculture, Forestry and Fisheries (Daff) Siphokazi Ndudane says in May 2021 she received letters from the bank terminating both her personal and business accounts, leaving her with no means to make a living. Picture: Henk Kruger/African News Agency (ANA)

Former deputy director-general at the Department of Agriculture, Forestry and Fisheries (Daff) Siphokazi Ndudane says in May 2021 she received letters from the bank terminating both her personal and business accounts, leaving her with no means to make a living. Picture: Henk Kruger/African News Agency (ANA)

Published Apr 22, 2022

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Cape Town - As Sekunjalo and Iqbal Survé await the Competition Tribunal and the Equality Court to rule on their application for an interdict against Nedbank in their battle with the banks, former deputy director-general at the Department of Agriculture, Forestry and Fisheries (Daff), Siphokazi Ndudane, and former Fedusa secretary-general Dennis George, along with others, have joined what has been dubbed as the “David and Goliath” fight.

This as Johannesburg law firm Gardee Godrich Attorneys this week filed 288 pages of court papers at the Western Cape Equality Court, looking into the systematic racial profiling used by the banking sector after the banks’ willy-nilly closure of bank accounts.

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The application is on behalf of clients who want to intervene as complainants in a class action in the proceedings instituted by the Sekunjalo Group of Companies’ (Sekunjalo) executive chairman Dr Iqbal Survé and others at the court.

Attorney Godrich Gardee, who has been involved in a number of public litigations previously, said his clients would have eventually brought their own case independently against the banks, but that the Sekunjalo matter had acted as a trigger and spurred them on.

He said the class action was about arbitrary termination of banking relationships by banks against any client of their choice.

For his part, George, in his affidavit, said he was previously banked by Absa but in August 2020 the bank sent him a letter terminating their relationship. In that letter the bank claimed his profile did not fit with its internal policy or risk profile.

George said the banks have overlooked the fact that the concept of “bank-client relationship” in common law is now mediated by statutory and regulatory framework.

He points out that these are: the Constitution, the Financial Sector Conduct Authority, the Conduct Standard 3 of 2020, the Financial Intelligence Centre Act, and the global standards set by the Financial Action Task Force, which is an international body that promotes policies and standards for combating money laundering, terrorist financing, and the financing of the proliferation of weapons of mass destruction.

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“I am also advised that there is no statutory law, regulation or global standard, which requires that banks unilaterally terminate the bank accounts of customers, subject to the exceptions referred to above,” said George.

He said the reason why the banks do not cite any statutory law, regulation or global standard for the termination of the applicant’s banking services is because there are none. “Hence they rely on the purported ‘common law of contract’ and ‘reputational and business risk’.”

In her affidavit, Ndudane said that after resigning as DDG in 2019, she registered a company and applied to open a business account at FNB, where she already operated a personal account. In May 2021, she received letters from the bank terminating both her personal and business accounts, leaving her with no means to make a living.

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In the court papers, Gardee’s clients said that pending the inclusion of the intervening parties as complainants in the case, they also intended to make an application declaring that the termination of their bank facilities was “arbitrary and unlawful.”

They also said that banks should be prohibited from enforcing discriminatory policies such as unbanking customers on the basis of purported reputational risk, and want the practice to be declared unfair discrimination in terms of the Promotion of Equality and Prevention of Unfair Discrimination Act (Pepuda).

In papers filed with the Equality Court in the Western Cape, Sekunjalo Group chairman, Dr Iqbal Survé, is asking the court to declare that the banks’ conduct constitutes unfair discrimination and that their decisions to close the group and its related entities’ bank accounts should be overturned.

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