Some of SA’s biggest banks have warned the Competition Tribunal that giving Sekunjalo an extension to the interim relief it granted the firm in 2022 over the closure of its banking facilities would create “legal chaos”.
The banks and the company were engaged in battle before the tribunal on Thursday. Last year, the tribunal found that in refusing to deal with the Sekunjalo entities, Standard Bank (among other companies) had acted unilaterally as dominant firms.
The watchdog initially granted an interim order against eight banks in September 2022, which expired in March, but it was rolled over to mid-September.
Standard Bank, Mercantile Bank and Access Bank appealed against the decision, and in July won the appeal at the Competition Appeal Court (CAC), setting aside the interim order that obliged the banks to reinstate, or not to close, the bank accounts of Sekunjalo firms, saying there was no prima facie evidence provided of anticompetitive harm.
The embattled Sekunjalo Group — comprising 35 applicants — petitioned the tribunal to extend the order for another six months to March 2024.
Standard Bank’s advocate Matthew Chaskalson argued that the legal parameters of the CAC are binding over the tribunal unless or until overturned by the Constitutional Court. Chaskalson said ignoring the stare decisis rule, a legal doctrine that obligates courts to follow historical cases when making decisions, would invite legal chaos.
“Sekunjalo has no escape from the CAC decision in this tribunal,” he said. “The legal conclusion of CAC is binding, and the tribunal must conclude there is no prima facie case to support the interdict or for an extension, or to have granted that order in the first place.”
In his rebuttal, Sekunjalo representative Adv Vuyani Ngalwana said that the legal principles in the CAC judgment cannot bind the tribunal because they are being appealed in the apex court.
He said what necessitated the extension of the order was that companies such as Ayo were using the accounts of smaller Sekunjalo subsidiaries, but warned that once the accounts of those companies were closed, “then it’s game over”, said Ngalwana.
“To date, we don’t know what any of the bank’s prejudice would be, they simply talk about reputational risk, this nondescript label that has been deprecated in at least three judgments of which we are aware”, he said, referring to the previous equality court and Pretoria high court rulings.
Acting for FNB, Jerome Wilson said his client was not party to the appeal against the tribunal’s decision and had dutifully followed the rules of the order until it lapsed in mid-September.
“Once an interim relief order has expired, you can’t get an extension,” he said. “It’s not sufficient that the application was brought before the lapse of the order, it must be heard and granted within the time frame.”
Wilson told the tribunal that as soon as the order lapsed a few weeks ago, FNB took immediate steps to terminate the relationship. There has been no indication from the Sekunjalo group and its affiliates since that their businesses have been negatively affected by FNB’s move, as the companies have already indicated in previous Sens statements that they have third-party solutions in place.
“The reasonable inference to make is that there are arrangements with other banks,” said Wilson. “There is no evidence that FNB’s decision to close these accounts has caused harm.”
Mercantile Bank’s counsel, Margaretta Engelbrecht, said there is no threat of closure of the Sekunjalo-related accounts by her client, but rather a halt on opening new facilities.
However, Ngalwana was quick to point out that history has shown that once one bank shuts its doors the rest will soon follow suit, making the extension necessary.
“FNB has led the way in the same way Absa did in 2020 ... that has been the modus operandi of the banks. They don’t act simultaneously, they act sequentially,” in closing bank accounts one after the other.
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