Menu Close

Sekunjalo bank account termination is prohibited by the Competition Tribunal

Competition-Commission office signboard

In what may be viewed as a victory for consumers who’ve bumped heads with SA banks, the Competition Tribunal granted Sekunjalo Group interim relief, preventing Standard Bank, Mercantile, and Bidvest from closing its bank accounts.

The court also ordered Nedbank, Absa, FirstRand, Sasfin, and Access Bank to reopen previously closed bank accounts for Surve’s Sekunjalo Group, Times Live reports.

The interim relief will remain in effect for six months from the date of the tribunal’s order or until the conclusion of the Competition Commission’s investigation into a complaint regarding restrictive practices filed by the Sekunjalo Group against the banks, whichever comes first.

In a statement, the tribunal stated that a total of 36 applicants, including the chairman of the Sekunjalo Group, Dr. Iqbal Survé, filed an application for interim relief against nine banks.

The applicants claimed that the banks’ actions in terminating their banking relationship violated the Competition Act by constituting an abuse of dominance and/or collusive behaviour.

The banks justified their behaviour by citing the reputational risk of doing business with the Sekunjalo Group in light of the findings of malfeasance and impropriety by Justice Lex Mpati, who chaired the commission of inquiry into Ayo’s (a company affiliated with Surve’s Sekunjalo Group) dealings with the Public Investment Corporation.

However, the tribunal denied the Sekunjalo’s request for interim relief in relation to Investec because the relevant accounts were apparently used for Survé’s personal banking not for the Sekunjalo group only.

It was stated that these accounts have no bearing on the Sekunjalo Group’s ability to compete or survive in the markets in which it operates.

The order did not include Survé’s personal accounts with Nedbank, which were unrelated to his business activities, it focussed only on  Sekunjalo’s bank accounts.

The tribunal ruled that an account held by one of the Sekunjalo Group companies, Ayo Technology Solutions Ltd, with a Nedbank entity in Lesotho that is not cited as a respondent before the tribunal is excluded from the order.

Regarding Sasfin, an account held by ESP Africa (Pty) Ltd, a member of the Sekunjalo Group, was excluded from the order because it was blocked from the start for failing to comply with FICA requirements.

READ MORE: Beware, homeowners: the rate jump may be greater than anticipated

The tribunal stated that its order does not require the banks to open any new bank accounts that did not previously exist or to provide any new services that were not previously offered to the applicable applicants.

The tribunal added that a public version of its decision’s rationale will be made available as soon as any claimed confidential information contained in the rationale has been finalised.

Related Posts