Africa’s largest lender by assets, Standard Bank, will have to hand over to a Belgian arms exporter information on the accounts of the Central Bank of the Republic of Guinea in a case that is likely to lift the veil on who controls the resources of the francophone country.
The high court in Pretoria ordered Standard Bank to give AD Trade Belgium the documents it requires as it pursues its claim against the government of Guinea. AD Trade sells military and security equipment and services.
The company and the government of Guinea entered into two contracts in 2011. The first, “Contract Leopard”, was to equip and train a new intelligence service for the newly elected president. The second, “Elephant Protocol”, provided for Guinea to acquire a military aircraft and to receive related training, parts, and services from AD Trade.
The Guinea government failed to honour the agreements, forcing AD Trade to approach the International Court of Arbitration, which ruled in its favour and made an award against the Republic of Guinea. The International Court of Arbitration is an institution for the resolution of international commercial disputes.
AD Trade has since identified the accounts of the country’s central bank held by Standard Bank as a source from which it could recoup money owed to it, in fulfilment of the International Court of Arbitration award.
The company approached Standard Bank seeking certain information on the accounts of the Central Bank of the Republic of Guinea. Its claim turns on the ownership of, and Guinea’s rights to and its relationship with, the funds held in the accounts of the central bank.
AD Trade asked Standard Bank to furnish it with the following documents:
- The purpose of the central bank opening its accounts and the legal and compliance steps taken by Standard Bank in the process of opening the accounts.
- Why the accounts were used as conduit for the disbursement of foreign currency.
- Legal and compliance steps taken by Standard Bank in relation to a €200m transaction as well as the reason for the deposit into the account of the central bank, the purpose of the funds and the particulars of the transaction resulting in the deposit.
- Whether Standard Bank provides banking facilities to the signatories to the central bank’s accounts and/or to Guinea.
- Whether the SA Reserve Bank’s permission to open the accounts were requested, and if so, documents in relation to the request.
- The submission of suspicious transaction reports.
Standard Bank’s response was that it had no knowledge of the information requested and that all the information in its possession had been disclosed to AD Trade.
The lender further told the court that the particulars sought by AD Trade were irrelevant to AD Trade’s cause of action.
Acting judge Zenta Marx du Plessis said knowing where the funds in the accounts of Guinea’s central bank originated, what purpose the funds were held in the accounts for, for what purpose money flowed into and out of the accounts, and who controlled these funds on behalf of the central bank was pivotal to the determination of AD Trade’s claim and the issues in dispute in the main action.
Du Plessis said this was because from the central bank’s statements, which Standard Bank disclosed to AD Trade, the last-mentioned was able to ascertain that large amounts of money were deposited into and disbursed from the accounts.
“Who the funds in the central bank’s accounts were received from, to whom the funds were disbursed, what the purpose of these funds are, and the identities of the signatories and Standard Bank employees directly dealing with the central bank’s accounts, are particulars that are relevant to the disputes in the main action, and which are strictly necessary for AD Trade trial preparation,” Du Plessis said.
“In view of the obligations imposed on Standard Bank [in terms of the Financial Intelligence Centre Act], and Standard Bank’s compliance therewith, Standard Bank cannot genuinely assert that the particulars sought by AD Trade are not in its possession.”
Standard Bank said it was studying the judgment before deciding its next course of action, with an appeal one of the options.
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