Independent Media and 30 other companies in the Sekunjalo Group will hear on Friday if it is to avoid the “calamity” that would result if its business bank accounts were to be terminated.
On Tuesday, the Group applied for an urgent interim interdict against Standard Bank in the Equality Court, sitting at the Western Cape High Court, to prevent the bank from closing its accounts on September 15.
Judge Judith Cloete will deliver her ruling on Friday.
The reasoning given by Standard Bank for the closure of the accounts was “reputational risk”, based on unfavourable reporting by rival media outlets.
Sekunjalo Group’s counsel said the banking institution has also targeted the 31 applicants because of their affiliation to Dr Iqbal Survé.
Survé is an entrepreneur, medical doctor, philanthropist and chairman of Sekunjalo Investment Holdings.
Independent Media is the largest newspaper publisher in South Africa and prints the Cape Argus, the Cape Times and The Star, in its stable of 15 daily and weekly titles.
Counsels for Sekunjalo argued that shutting the bank accounts would infringe on the constitutional right to freedom of speech and the right to trade.
Muzi Sikhakhane SC submitted that terminating the business accounts would have thousands of employees facing the “calamity” of joblessness.
“You cannot trade without a bank account. It is not Standard Bank’s case that the applicants violated any statutes. The essence of their case is reputational issues. What they read. Associations with Dr Survé. This is the danger of relying on negative media reports,” he stated.
He continued: “Conflict could arise if banks close accounts and say they do not have to prove what they suspect. If these accounts close on Friday, every other litigation relating to this matter [including in the Constitutional Court] will become academic.”
Sikhakhane said this case illustrated the harm banks can do to businesses and individuals for “flimsy” reasons.
“The implications of this are not only to the applicants, but to each and everyone in this room. Standard Bank cannot say what harm has been caused. Standard Bank suffers none; the only convenience they have is that applicants they don’t like, accounts are closed.
“This is what we need to show South Africans — their flimsy, prejudicial and political reasons.”
Legal counsel for Standard, Robin Pearse SC, claimed that his client was not the 31 companies’ “primary” financial service provider.
“These applicants will not be unbanked come the weekend even if Standard Bank were to close the accounts. There are a number of banks that continue to bank the applicants, including their ‘primary bankers’ Absa and Nedbank. Those banks are under [court] orders to hold their accounts open. The calamity would only arise if this were not the case.”
Pearse also alleged that the applicant companies had not fulfilled their Financial Intelligence Centre Act (FICA) obligations.
“Standard Bank is not satisfied with the way the companies were operating their bank accounts,” he said, citing Sekunjalo’s investment deals and “suspicious“ transactions between the companies.
Judge Cloete quipped that it would be unlikely that Nedbank and Absa would “welcome” the companies into their offices, open business accounts for them and offer them “fat overdrafts”.
And in his rebuttal, Vuyani Ngalwana SC for Sekunjalo, said for 22 of the 31 companies which had business current accounts with Standard Bank, “there is no alternative”. He noted that all nine media companies banked with Standard.
“The applicants would not be able to approach the other banks, as they too have tried to unbank them,” he added.
Ngalwana also emphasised that FICA was not listed as the original basis for the termination of the bank accounts; this was an “afterthought”.
Standard Bank had threatened to shut the group’s accounts last month after the Competition Appeal Court overturned last September’s Competition Tribunal ruling and handed down a judgment in favour of Standard Bank, Mercantile Bank, and Access Bank, effectively allowing these banks to unbank the Sekunjalo companies.
Sekunjalo filed an application to appeal this ruling in the Constitutional Court, which caused the banks to reconsider and revert to the earlier Competition Tribunal ruling, whose D-Day was set for September 15, or until such time as the Competition Commission concludes its investigation into Sekunjalo’s allegations.
robin.francke@inl.co.za
IOL