Capitec, with its sights on growing its business banking division, stopped alleged “gold mafia” Rappa Resources from moving foreign currency using its facilities after media reports flagged the group’s dodgy business dealings.
Rappa processes mining residues and waste material to extract precious metals, primarily gold and silver. It then exports gold-bearing bars.
It is, along with other entities, accused of short-changing the fiscus to the tune of billions of rand by introducing untaxed gold into the supply chain and faking VAT payments for this bullion.
Business Day understands that the Johannesburg-based Rappa in May last year opened a business account with Capitec Business.
However, the relationship was short-lived as Capitec two months later informed Rappa that it was conducting a review of its business and transactional activities.
The Stellenbosch-based lender said pending the finalisation of its review, the bank will not process any further foreign currency transactions on behalf of Rappa.
“Rappa had featured in various adverse media reports. Capitec does not express a view on the veracity of such reports but merely records that this is available in the public domain and that Capitec is therefore entitled to consider these in its risk reviews,” the bank wrote to Rappa.
“Capitec, after careful consideration of, among others, the business activity of Rappa, including its nature and purpose of business activity, ownership and control structure, source of funds, transactional activity value chain, etc, concluded that a continued banker-client relationship with Rappa is outside its risk appetite.”
Business Day reported in March 2024 that the SA Revenue Service (Sars) obtained a court order compelling Rappa to hand over documents it needed to prove a tax liability of more than R4bn in a matter implicating several industry players.
The documents include its “know your client” documentation of its suppliers from January 2019 to June 2020 and its bank statements for the 2018 financial year. Sars will have in its possession Rappa’s records containing declarations made to the SA diamond and precious metals regulator on the breakdown of goods bought from suppliers from January 2019 to March 2020.
The gold refinery firm suffered a further blow in March when Bidvest Bank joined Capitec and told Rappa that it would shut down several of the accounts the company held with it.
“The bank has assessed the conduct on your accounts and determined that the transactional behaviour on the accounts is outside its risk appetite,” Bidvest wrote to Rappa.
Pressure
New kid on the block Bank Zero has also declined the group’s request to bank with it, adding pressure on the group’s remaining lenders to review their relationship with the company.
“Being so digital enabled us to build an onboarding process which automatically stops entities if publicly available adverse media is identified. Only Exco may decide whether an entity with confirmed adverse media may become a customer,” the bank told Business Day.
“Both Rappa Holdings and Rappa Resources attempted to onboard but were automatically and effectively stopped long before any onboarding could be concluded.”
Sars has sought access to Rappa’s documents on transactions of goods containing gold material received from cash-in-transit, paymaster companies and courier companies.
Some of the companies Sars is pursuing are Gold Kid and Northern Spark — both linked to Andries Greyvenstein, flagged as a key cog in moving gold and illicit funds out of SA in an Al Jazeera exposé in 2023.
Sars is on the hunt for Greyvensteyn’s assets in the United Arab Emirates and the US, seeking to recoup about R3bn it says is due to the fiscus.
Greyvensteyn’s movements out of the country have been severely restricted after Gold Kid, now under the management of a curator, had been found to be fraudulent by the tax agency.
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