Dodgy data leads to bank account closures

False data or information is often used to pronounce life-changing sentences on the people and/or companies being looked at. Picture: Gerd Altmann/Pixabay

False data or information is often used to pronounce life-changing sentences on the people and/or companies being looked at. Picture: Gerd Altmann/Pixabay

Published Sep 12, 2023


EVERY day we generate millions of bytes of information and this data is stored (somewhere) and is used to profile us – whether we have consented to this or not. This is a fact. Chief among the data profilers determining our lives is the financial sector.

Interpreting this data and ensuring it is correct in the first instance is supposed to be an absolute given, but, as is becoming increasingly clear, this data is often corrupted from the start. This false data or information is then used to pronounce life-changing sentences on the people and/or companies being looked at.

The term “financial inclusion” is bandied about at large these days and refers to getting as many people as possible to open bank accounts and transact as part of the economy. This is because, in the formal economy, trading and paying for just about anything without one is nigh on impossible. So impossible, that absence of access to banking services arguably effectively renders a person a non-entity.

Banks are mandated to assist the economy of a country by making their services accessible so that this financial equality can occur. With so many people in the system, it stands to reason that mistakes can happen, and they do … an example of which I will get to shortly.

Although having a bank account is now a necessity, there is also a downside. Our every move is tracked and monitored by our banks – they know where we swipe our cards whether it’s on home soil or abroad.

They know what we buy, where we buy it, how much money we have in the bank or don’t, and when our reserves dip below a certain threshold. How many of us have that unsolicited call asking if we want to extend our credit limits?

They have our IDs, know where we live, what our contact numbers are, and, with the increased reliance and use of AI, they know with an educated and computationally derived calculation almost the smallest detail about us, all our habits, who we are as people and what makes us tick. Even down to what triggers and buttons to push to get us to react.

This data is also used by the global financial industry to supposedly prevent financial transactions that may infringe laws, such as money laundering and financing to support terrorism. These databases are, therefore, required to be unquestionably accurate and verifiable because they are relied on to decide whether to act to axe someone from access to this critical tool, or not.

While the banking and financial sector at large have a great deal of rules and regulations, no such oversight exists for these data agencies. So, there is no one to challenge them on their mistakes – of which there are many. They appear to be accountable to no one.

An article that appeared in the UK’s Daily Mail last month highlights this problem, with experts saying how bank accounts are being closed without explanation using information from flawed online databases.

Prominent Brexiteers Nigel Farage and Claire Fox are two such victims. Many thousands of others have been affected, but Farage and Fox’s cases have amped up the attention on this dire situation.

It is a major problem … especially because it appears there is very little one can do to fix the problem if the database happens to have the wrong information or badly collated information. This is certainly the case with the Sekunjalo group of companies’s own bank account closure watershed.

Sekunjalo and some of its more than 200 subsidiaries are taking several of the country’s banks head-on for attempting to close (some have already) all their company bank accounts, and some of the shareholders, directors, and managers associated with these organisations.

Every single one of the banks (and there are nine of them), has used “reputational risk” as their reason for closing these accounts. Nothing more and nothing less – no further explanations necessary.

At least one of the banks has relied on what is called the “world compliance report”, taken from the LexisNexis database, which gathers its data from more than 1 000 global law enforcement agencies and relies on collating adverse media reports. In an era of fast and fake news, this is a seriously terrifying prospect.

The accused – On this report, created in February 2019 at the time of the infamous Mpati Commission and by an unnamed author, and which report we have had sight of, it lists Dr Iqbal Survé (the common denominator – directly or indirectly – of all the Sekunjalo companies) as being “accused of financial crimes”.

This is the first major error:

The word “accused” according to several legal dictionaries, including that of the LexisNexis Dictionary of Legal Terms and Phrases, means to have formally charged someone with a crime – importantly, it also defined in terms of 35 (3)(h) of the Constitution of South Africa Act 1996 defined in S vs Baloyi 2000 1 SACR 81 (cc), which also states that an “accused” is entitled to a fair trial and is presumed innocent until proven otherwise. Other definitions of this word also include “a person who has appeared before justices to answer to a charge”.

Since Survé has not been charged with any offence, under any statute of any law in any country in the world, the use of the word “accused” is entirely wrong and is, therefore, a blatant lie. And, because he has not been charged with anything, he has not appeared before justices for any trial.

The “trial” has, however, played out in the media, which leads me to the second blunder.

Adverse media – The report, last updated in April 2021, is entirely based on adverse media reports. There are no law enforcement comments recorded at all. That there is zero legal commentary should be an immediate red flag for anyone reading this. Why are there no formal charges? No formal charges so how can someone be “accused”?

But it is how the various adverse media report links are summarised that is a serious issue. These synopses are captured above a list of links leading to the articles they purport to have been summarised. They are therefore the first things that are read, setting the scene as it were.

An example in the Survé Lexis Nexis report: IOL is a subsidiary of the Sekunjalo Group and its media counterparts, Independent Media (The Star, Sunday Independent, Cape Times, Cape Argus, The Mercury, Daily Voice, Daily News, Isolezwe, et al), ACM, Condé Nast and more. It is fighting to keep its bank accounts open. So, we highly doubt IOL would have written a piece summarised by Lexis Nexis as: “According to the; February 14, 2019: Iqbal Survé colluded with some AYO Technologies board members to secure an investment from the Public Investment Corporation, which eventually led to the PIC making a ZAR 4,300,000,000 investment in Ayo, the IT Company.”

The link it refers to is about a television interview given by Survé after the Sunday Times had accused him of colluding. Not the same thing as the above synopsis at all. It is misrepresentation and misleading.

There are others too.

Further, that these “adverse” media reports are often OpEds, in which the subject’s comment is not required to be obtained or included, and which are written in a specific way to influence the reader, is also problematic. We are not saying this is only in relation to Survé, as media the world over are no longer the unbiased objective sanctum of truthful reporting they once were. Everyone has an agenda.

Half-built picture – As aforementioned, the report has not been updated since 2021. There is no record of the fact that Sekunjalo has taken the banks to court and is suing them for, among other things, discrimination, collusion and anti-competitive behaviour.

That the High Court, in advance of the Equality Court, found that there is a prima facie case for discrimination against Sekunjalo and Survé has never been recorded. If LexisNexis had done their job properly and were truly monitoring this individual, they would have listed this on this report, then it would paint a different picture, and perhaps a more complete one.

The LexisNexis report is at best an informal account and cannot be relied upon to pronounce and form judgment on anyone. It is, in fact, a biased, one-sided account of affairs that has created extreme prejudice against this Group, whom I am sure is not alone, as Lexis Nexis and its cohorts operate all over the globe.

  • Sizwe Dlamini is head of investigations and acting editor of the Sunday Independent.