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Today, December 18, 2023, judgment was handed down by the Supreme Court of Appeal (SCA) in the matter of Nedbank challenging the interim interdict awarded to the Sekunjalo group of companies (Sekunjalo) that prevented Nedbank from closing any of the company bank accounts, and reopening those already closed, until such time as the conclusion of the main Equality Court case in Sekunjalo’s claims of discrimination against it.
In a highly unusual move, Nedbank appealed an interim interdict.
Sekunjalo is utterly shocked by the so-called ‘reasoning’ behind the SCA’s granting Nedbank the right to effectively terminate any banking facility of any company associated to the Sekunjalo Group. This leaves the Group with no other choice than to appeal to the good sense of the Constitutional Court of South Africa (the ConCourt).
In March last year, Judge Mokgoatji Dolamo found that there was a prima facie case of discrimination by Nedbank against Sekunjalo in closing their accounts. In October last year, the interim interdict was appealed with Dolamo again ruling in favour of Sekunjalo. However, Nedbank subsequently took the matter to the Supreme Court of Appeal, whose findings, in a complete about turn to those of Dolamo, were released today in favour of Nedbank.
In what is a landmark case to prove discrimination in how South Africa’s banks treat customers differently according to their racial classification, this sensitive case was judged by a panel of five white judges at the SCA. Not to impugn the integrity of these judges, but it is highly unusual and especially so given that every other case at the SCA on the day that this matter was heard, had been presided over by a bench fully representative of South Africa. Why not this matter?
The judgment contains some obtuse observations, one, for example, claiming that Sekunjalo had not conclusively proven that EOH, Tongaat Hulett and Steinhoff whom it cited of being treated differently, were in fact white-owned. Sekunjalo contends that the judges did not apply their minds to this point at all.
At the time of Sekunjalo launching its original application, all these companies were listed on the Johannesburg Stock Exchange (JSE), were predominantly managed by white people and whose shareholders were also mainly white. Thus, in terms of the BBB-EE Act, they are determined to be “white”. These facts were common knowledge and were overlooked by the SCA.
Also, common knowledge, is that each of these companies have been found guilty of criminal acts not least of all fraud.
Nedbank claims that these three companies had undertaken remedial action and were thus allowed to keep their accounts open.
Although Nedbank sent Sekunjalo a list of concerns, none of them demanded specific remedial action other than requesting Sekunjalo appoint an independent firm to review the Mpati Commission report – the genesis of Sekunjalo’s current challenges – which Sekunjalo did. Sekunjalo appointed Advocate Willem Heath, a former judge to conduct said review.
Sekunjalo also responded to Nedbank with comprehensive information of more than 100 pages of documents, as well as attended two separate meetings. Despite this, Nedbank claimed to the SCA they had not been provided with a proper response by Sekunjalo. There was no comeback from Nedbank to the Sekunjalo question of what a proper response looked like either. All of this, the SCA overlooked.
Most importantly, Sekunjalo has not been found to be suspected of any financial misconduct, therefore it has not been tried nor found guilty of such. Indeed, Nedbank, in writing, confirmed that Sekunjalo had not been found to have done anything wrong. Thus, there is no need for Sekunjalo to take any corrective action. This was also ignored by the SCA.
Nedbank cited the Mpati Commission report for its initial determination to distance itself from the Sekunjalo Group. Again, the judges have not applied their minds to the fact that Mpati was just that, an inquiry. It was an Inquiry into the Public Investment Corporation (PIC) not any of the Sekunjalo companies. Nor did they consider that any recommendations coming out of it in so far as Sekunjalo is concerned, have already been undertaken.
The SCA failed to acknowledge that Nedbank had received the entire Advocate Willem Heath review of the Mpati Commission Report.
Heath independently and objectively found that the Mpati Commission had erred in several material aspects and that Sekunjalo has been treated unjustly. The SCA also inexplicably disregarded that Sekunjalo has launched a formal review of the Mpati Commission Report.
In light of the above, together with other clearly disregarded facts, the decision by the SCA is unreasonable and irrational. There is zero justice in Nedbank, or any other bank, destroying the businesses that are impacted by these decisions.
Sekunjalo is hopeful the ConCourt will consider the apparent discrimination against it, especially against the backdrop of Nedbank’s own admission in writing that the Group had not committed anything wrong.
We once again make the point that banks are targeting Sekunjalo to eradicate black businesses from taking their rightful place in the economy, to maintain the status quo where white-owned and managed companies continue to dominate the capital markets and economy of this country.
Sekunjalo remains standing and will continue to clear its name so that it can maintain its hitherto meaningful contribution to South Africa’s continued transformation.
Sekunjalo Investment Holdings