AYO Technology Solutions has applied for an urgent interdict against Access Bank South Africa in a bid to restore two accounts that the bank closed without notice.
Judge Nobahle Mangcu-Lockwood reserved judgment on Friday in the Cape Town High Court in a case that AYO’s legal counsel, Advocate Tanya Goldin, said was “extremely urgent”, because the listed technology company had no banking facilities, was being forced to operate unsustainably as an investment holding company instead of as an operational trading company, and the future of thousands of employees hung in the balance if its bank accounts were not restored.
She said a large portion of the funds affected by the closure of the accounts had been sent to Ninety-One, and AYO had no access to these funds as the asset management company was only able to forward the funds into a valid bank account.,
Golding said Access had breached its statutorily defined customer relationship agreement with the clients, and key to her evidence was that the closure of the account represented a public administrative act, due to the large and wide-ranging number of regulatory controls over the banks.
Access’s senior counsel, Advocate Adrian Botha, claimed in his submissions that the account closures were merely a contractual agreement between the bank and the client.
Botha said the fact that AYO might be investigated for its role in a R4 billion investment by the Public Investment Corporation meant that the bank ran the risk of holding funds obtained through unlawful activities, and the bank did not have the risk appetite for the reputational and legal compliance risks of opening bank accounts on AYO’s behalf.
Goldin said the bank had the obligation to investigate the media reports upon which Access had based its decision to close the bank accounts. Botha had said that it was not up to the bank to determine whether allegations in media reports about clients were true or false, and Access Bank also did not have the capacity to conduct such investigations.
Botha claimed the two accounts, closed on May 31, had only been opened for eight days and 21 days respectively, and had been opened in error after a series of letters between the parties prior to the opening of the accounts had indicated that the bank did not want a banking relationship with AYO.
Goldin, however, told the court that the closure of the accounts, without notice, and without letting the client make representations about their potential closure, however long the accounts had been open, and whatever the size and capacity of Access Bank in the South African market, was manifestly unjust, irrational, unreasonable and unlawful, and they needed to be restored immediately.
edward.west@inl.co.za
BUSINESS REPORT