The SA Reserve Bank has issued more than 300 forfeiture orders in the past five years to scores of individuals and entities found wanting in terms of SA’s exchange control regulations, netting the fiscus billions of rand in the process.
A cursory examination of the notices, legally called a “notice and order of forfeiture” by the central bank, since 2021 shows the Bank has been on a drive to punish those found breaking exchange control rules after investigations by its financial surveillance department (FinSurv).
It was this push for compliance that culminated on Friday in the seizure of more than R6bn from different accounts of Ibex Investments, formerly Steinhoff, over contraventions of SA’s exchange control regulations.
The Bank said in a government gazette published on Friday that it had seized more than R6bn from several Ibex accounts, having frozen such funds as it conducted its investigations into the company’s cross-border transactions. These happened under former Steinhoff CEO Markus Jooste, who took his life earlier this year as law enforcement agencies prepared to arrest him.
Forfeited
According to the Bank, the R6bn plus interest will be forfeited to the state.
SA’s regulation 22A of the exchange regulations permits the Treasury to attach assets linked to or suspected of being linked to contraventions of the regulations. The more than R6bn seized from Ibex will thus be transferred to the National Revenue Fund.
The seizure comes just months after Ibex completed the successful placing of 500-million Pepkor Holdings shares, raising total proceeds of R9bn. On conclusion of the placing Ibex’s interest in Pepkor reduced from 43.7% to about 30.2%. Ibex, which might yet legally challenge the seizure, was not immediately available to comment on the move by the Bank.
The company gave some insight into this matter in its results for the year to end-September 2023, indicating that FinSurv had issued a blanket transfer ban, which prohibits any SA-resident Ibex entity from transferring any assets out of SA without the Bank’s express written consent.
“On 18 May 2023 and 30 May 2023 Finsurv issued separate orders under ECR 22C of the exchange control regulations (the ‘ECR 22C orders’), prohibiting the withdrawal of funds from certain accounts of SIHPL, Ibex Investments and SAHPL,” it said.
Subject to approval
“Those accounts of the above SA Group Services entities which are subject to the ECR 22C orders hold €335m (R6.7bn) in aggregate as at the reporting date. The funds are subject to SA Reserve Bank approval prior to making any withdrawals.”
The company’s results indicate that during September and October 2023, SIHPL, Steinhoff’s SA holding company, received approval from FinSurv to withdraw R854.6m of the blocked funds, which was used to partially repay debt.
“Ibex Investments, SAHPL and SIHPL received a letter from the SARB under the heading ‘Alleged contraventions of the provisions of the exchange control regulations’. The SARB therein requested Ibex Investments, SAHPL and SIHPL to make representations for consideration by the governor or a deputy governor of the SARB as to why some or all of the blocked funds should not be declared forfeit as provided for in regulation 22B of the exchange control regulations.
“The group responded to this letter on January 31 2024. Amongst other things, the response disputes the lawfulness of any decision to declare forfeit any of the blocked funds, pending the outcome of the review application initiated on December 1 2023.”
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