The Competition Tribunal heard yesterday that Sekunjalo Investment Holdings and its group of companies would face irreparable harm, including significant job losses and potential closures, if Nedbank did not reopen their bank accounts.
The hearing followed Sekunjalo’s application for an interim interdict compelling Nedbank to reinstate the accounts. This development comes amid a long-standing dispute where South Africa’s five largest banks, dominating the banking sector, have either closed or threatened to close Sekunjalo’s accounts, citing alleged reputational harm.
In November, the Competition Commission found that Nedbank and other banks colluded to exclude Sekunjalo from the banking market through prohibited practices.
Advocate Katlego Monareng, representing Sekunjalo, argued that the Tribunal was not being asked to rule on whether prohibited conduct had occurred but rather to determine if a prima facie case existed for granting the interim relief.
He stated that Sekunjalo relied on the Commission’s findings to support their case.
Monareng highlighted the dire consequences if banking facilities were denied. He said that no South African company could operate meaningfully in the economy without a bank account. Excluding a significant player like Sekunjalo from the mainstream economy, he argued, should not become normalized.
He further stated that this exclusion would lead to job losses, including at Premier Fishing, a Sekunjalo investee company employing 1 000 people, among them 90 vulnerable fishermen.
Saving these jobs, Monareng noted, aligned with the goals of promoting competition and advancing employment. He also pointed out that Sekunjalo operated in sectors with high barriers to entry, where the absence of normal banking services would drastically increase transaction costs.
This could lead to business closures, stock market delistings, and ripple effects on industries such as fishing, ICT, media, e-commerce, tourism, and investment.
Monareng dismissed alternative payment systems as financially unfeasible due to their higher costs compared to standard banking. He also noted that while some Sekunjalo investee companies held accounts with Bidvest Bank, the bank’s sale to Access Bank complicated matters, as Access Bank had already decided not to work with Sekunjalo.
Furthermore, he argued that Nedbank had not provided evidence of reputational harm from banking with Sekunjalo’s companies.
In response, Greta Engelbrecht, senior counsel for Nedbank, contended that Sekunjalo had failed to present evidence of alleged collusion among the banks over the 15-month period leading to account closures. She maintained that “follow the leader” behaviour in business practices does not constitute a violation of competition law.
Engelbrecht also argued that each of the 28 applicants in Sekunjalo’s application needed to show how the account closures specifically impacted them.
The Tribunal is now deliberating on the matter.
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