The CEO of bank and wealth management company Sasfin Holdings says the actions of staff who colluded with a criminal syndicate to circumvent exchange control and anti-money-laundering controls have been felt within and outside the group.
But Michael Sassoon has backed the company to bounce back stronger from the experience.
In the group’s annual report published on Wednesday, Sassoon said that apart from firing the implicated employees and opening criminal cases, the company has taken steps to bolster its compliance and control functions.
“The impact of this syndicate has been felt deeply and personally by all Sasfin’s stakeholders and has strengthened our resolve to detect and prevent attempts at financial crime abuses, which are plaguing our country. We have acted with urgency to enhance our operational systems, controls and compliance functions systematically and comprehensively,” Sassoon said.
“While the outcome of these issues resulted in adverse media, I am confident that [with] our steadfast commitment to addressing these legacy issues head-on, strengthening our overall governance and combined assurance controls, as well as our deep stakeholder relationships, we will emerge through this challenging time stronger.”
The Reserve Bank has launched its own investigation into Sasfin’s involvement in breaching exchange control regulations, “which did result in allegations of noncompliance, which could result in potential sanctions”.
Al Jazeera reported earlier in 2023 that staff of Sasfin and two other banks had been on the payroll of Mohamed Khan, an alleged accomplice of cigarette magnate Simon Rudland, who is alleged to be the kingpin behind multiple Zimbabwean gold smuggling gangs.
These are said to smuggle gold into SA, the proceeds of which are allegedly laundered through Khan’s company, Salt Asset Management, before being transferred to offshore bank accounts.
The Daily Maverick also published an investigation into how Sasfin was involved in helping Rudland and associates launder money linked to illegal tobacco smuggling.
“We have worked with our regulators who also have conducted their own investigation into Sasfin’s compliance, governance and internal control standards. The outcome of this investigation has resulted in allegations of noncompliance by Sasfin, which, subject to representations and remediation steps, may result in potential sanctions,” Sassoon said.
Sasfin is in the process of selling its capital equipment finance and commercial property finance businesses to African Bank for about R3.26bn.
Sassoon said the group’s focus is to grow market share in its wealth management unit, which has assets under management and advice of R66.4bn.
“We see further opportunities for wealth, which has evolved from a private client stockbroking business [built over 100 years] into a diversified wealth and investment manager, to continue its growth trajectory, particularly in scaling in the institutional client space,” Sassoon said.
“This is being supported by an investment in our teams, where we are pleased to have brought on board top-level asset managers attracted by Sasfin’s brand and reputation in a particularly competitive industry. We continue to assess strategic investment opportunities as they arise, including in selected international markets, to diversify our revenue streams and markets.”
Updated: November 29 2023
This article previously incorrectly said the share price was down 15%. It was in fact up 15%. We regret the error.
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