CAPE TOWN - While some of the country’s banks including Nedbank have relied heavily on “reputational risk” to unbank black-owned Sekunjalo Investment Holdings (SIH), it is yet to provide “a shred of evidence which shows risk or harm”.
And while the banks insisted that keeping Sekunjalo as a client would cause them “irreparable harm”, Sekunjalo argued that Nedbank was in fact the one who “poses risk to its stakeholders” and further submitted that the banks had discriminated against the group based on race.
Arguing before the Equality Court sitting in the Western Cape High Court, Sekunjalo’s legal representative, advocate Vuyani Ngalwana SC, said: “Steinhoff has caused more harm, far greater harm to the country, not just the Public Investment Corporation (PIC) in which it is invested and yet nothing has happened. They haven’t had their bank accounts shut.
“Nedbank relies on its reputation and I’m advised to emphasise … that following the release of the Zondo Commission’s report on State Capture, in January 2022, Nedbank itself poses a risk to its stakeholders let alone stakeholders or customers posing a risk to Nedbank. In the Zondo report, Nedbank is implicated in allegations of corruption pertaining inter alia to Nedbank’s relationship with the Regiments Capital as well as the Gupta-associated entities … it can be said that the banks unlawful conduct has been made in the Zondo report yet according to Nedbank, its conduct was lawful … But the point being made is that Nedbank is itself a reputational risk. So it’s rich of it to say such things,” said Ngalwana.
He told the virtual hearing that the banks had not disputed the fact that it had discriminated against Sekunjalo based on race as it had not taken the same action against white-owned companies.
Judge Mokgoatji Dolamo is expected to make a judgement on the urgent interim order pending the outcome of the main case in which Sekunjalo submitted that the banks had infringed on its right to trade, its right to dignity and dignity of its employees, its affiliates, stakeholders and associated and infringed on its right to equal protection and benefit of the law and not to be discriminated against.
In court papers Sekunjalo Group chairman, Iqbal Survé said the banks had a serious case to answer as they had violated the group’s constitutional rights.
In its heads of argument, Sekunjalo submitted: “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.”
The group is asking the court to overturn the bank’s decisions to have the group and its related bank accounts closed until the matter is heard in court.
However, counsel for Nedbank, Alfred Cockrell SC, was adamant that Sekunjalo had “no prima facie case” to prove racial discrimination and submitted that the “entire case of race is lost out of the starting blocks as there is no factual basis that Nebank’s treatment was drawn on race”.
He told the court that in the absence of proving this, the Equality Court has no jurisdiction over the matter.
In his reply, Ngalwana said: “Where a complainant brings an application to the Equality Court but also in the facts that he has pleaded, also seeks the kind of relief that would otherwise have been granted by the High Court, that in itself, does not denude the Equality Court of jurisdiction.
“One judge can sit as the Equality Court judge to hear both matters and have them consolidated … the Equality Court proceedings are intended to be quick … This is intended to be a quick process, not a long drawn out process,” said Ngalwana.
Cape Times