Iqbal Survé’s investment outfit Sekunjalo Investment Holdings has failed in its latest bid to compel Nedbank to reopen its accounts, in a drawn-out dispute that has played itself out for several years.
The Competition Tribunal on Thursday said it had dismissed an interim relief application by Sekunjalo and 27 entities in the stable, which sought an order forcing Nedbank to reinstate their bank accounts.
The Cape Town-based Sekunjalo approached the tribunal after Nedbank terminated its accounts in early December.
“On December 17 2024, the tribunal heard an urgent interim relief application by Sekunjalo, which sought an interim order to reinstate or restore the accounts and all associated banking services under the same terms and conditions that existed prior to the termination,” the tribunal said.
“Sekunjalo requested the reinstatement of the bank accounts for either six months or until the conclusion of a hearing into the alleged prohibited practices complaint against Nedbank, filed with the Competition Commission, whichever comes first. Nedbank opposed the interim relief application.”
Nedbank has cited “reputational risk” for closing the Sekunjalo accounts, while the company has claimed racial bias on the part of the lender.
In December 2023 the Supreme Court of Appeal (SCA) set aside an equality court interdict barring Nedbank from closing the accounts of companies in the Sekunjalo stable.
Survé and Sekunjalo argued before the equality court that the bank’s decision to close the accounts amounted to unfair discrimination on racial grounds. The applicants in the case were Survé and 43 others representing the Sekunjalo Group, while the respondents were Nedbank and Nedbank Private Wealth.
The basis of Sekunjalo’s racism allegations was that it was treated differently because it was black owned, while entities such as Steinhoff and Tongaat Hulett were treated with kid gloves even after allegations of fraud against the companies were proved true.
The SCA judges said there was no evidence before them that Nedbank behaved in a racist manner.
Nedbank, in its 2024 annual report, said in 2023 it severed ties with nearly 200 customers over “reputational risk” concerns. It said it had to take action and offboard the accounts.
“Such decisions are taken only after a rigorous assessment and an internal independent governance process with reference to all the relevant information and facts have been followed, including a comprehensive due diligence process overseen by the board,” Nedbank said in the report.
“Nedbank is bound by client confidentiality and therefore does not disclose client matters in our external disclosures. As a result of our ongoing reviews of client activity and related reputational risks, during 2023 we offboarded just more than 190 clients.”
Financial Sector Conduct Authority (FSCA) commissioner Unathi Kamlana last year urged banks to reflect on whether the prevailing common law position relating to closure of customers’ accounts is fair to clients.
“As the FSCA, our primary interest on this issue lies on ensuring that the process of bank accounts closures is fair and transparent. So what do we envision when we talk about a fair and transparent process?
“In accordance with our conduct standard for banks, we mean fully engaging with customers and providing them with reasonable notice and clear reasons for the closure of their accounts,” Kamlana said in his prepared speech.
“Banks should not simply cite reputational risk; reasons must be concrete and consistently applied to prevent what might appear as arbitrary account closures. Customers must also have the right to appeal or seek redress to ensure the process remains just and equitable.
“The mechanism for appeal and redress should be straightforward and accessible, enabling affected parties to challenge decisions they believe are unfounded or have been applied unfairly,” he said.
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