The Reserve Bank’s Prudential Authority has fined Sasfin nearly R210m for breaching SA’s foreign exchange laws. However, the company still faces a mammoth R4.9bn tax bill from Sars, which it is disputing.
Sasfin, which has begun a process to delist from the JSE, said on Tuesday that the central bank had informed it of its decision to impose a R209.6m fine, of which R49m was suspended, meaning the company would have to pay the fiscus R160.4m.
“These sanctions principally relate to allegations of historic noncompliance within Sasfin Bank’s discontinued foreign exchange business. Sasfin has [worked], and continues to work proactively and transparently with the relevant authorities and regulators,” the company said.
“Sasfin has taken legal advice and is considering further representations, which could result in a review or appeal of the sanctions in terms of the provisions of the relevant regulations.”
In 2023, Al Jazeera reported that staff of Sasfin and two other banks had been on the payroll of Mohamed Khan, an alleged accomplice of cigarette magnate Simon Rudland, alleged to be the kingpin behind 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 CEO of bank and wealth management company Sasfin Holdings, Michael Sassoon, in the group’s 2023 annual report said that apart from firing the implicated employees and opening criminal cases, the company had bolstered 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 at the time.
Sasfin is also trying to fend off a civil summons from the SA Revenue Service for a staggering R4.9bn plus interest and costs, in a novel lawsuit that tests the tax collection agency’s boundaries.
The claim, rejected as baseless by Sasfin, stems from Sars’ alleged inability to collect taxes and penalties from former foreign exchange clients of the bank involved in a criminal syndicate that colluded with some of the bank’s employees to expatriate money illegally.
Sasfin also said it had received regulatory approvals for the sale of its capital equipment finance and commercial property finance businesses to African Bank (ABL) for R3.26bn.
“The board of directors of Sasfin is pleased to announce that on August 1 2024, final regulatory approvals, including from the minister of finance, have been obtained. The disposal for circa R3.25bn based on the loan balances as at the end of June 2024, will now be effected in accordance with the disposal agreements and regulatory implementation requirements which will be fulfilled jointly with ABL.
The conclusion of the disposal of Sasfin Bank’s Capital Equipment Finance and Commercial Property Finance businesses marks an important step in Sasfin’s strategic reset.”
In July, Sasfin said it would soon delist from the JSE after it offered minority shareholders nearly R1bn to buy them out and take the company private.
The offer, at R30 a share, was a 65% premium to the 30-day volume-weighted average, the group said, adding that the transaction would be funded by its two largest shareholders, Unitas Enterprises and black women-owned investment company Wiphold.
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