Sekunjalo seeks documents underlying banks’ decision to close its accounts

Published Feb 2, 2024


The Sekunjalo Group and its chairman, Dr Iqbal Survé, have maintained they “haven’t swapped horses” by bringing an interlocutory application for the banks to produce documents which directed their decisions to close the black-owned group’s accounts.

Arguing for the group in its application for the documents to be produced, Vuyani Ngalwana SC said the High Court had inherent power to order such documents to be produced, despite this not being sought in its main application.

Meanwhile, Mercantile Bank had been excluded from the interlocutory application proceedings as the group conceded it had no case against the party in terms of Rules 35 (12) and 35 (14) on which Sekunjalo relies for its sought relief.

Ngalwana argued that the banks made their decisions to have the group’s bank accounts closed, in terms of their individual risk assessment policies and relied on negative media reports for their “reputational risk” arguments.

He said: “A point not being raised in court cannot be an impediment to justice”.

But he averred that the court could issue an order as it had the inherent power to do so in terms of the Uniform Rules of Court’s rules 35 (12) and 35 (14).

Sekunjalo has sought, from each bank party to the litigation, documents which include policies, transcripts or tape recordings (where they exist) which informed their decisions to close the accounts, relying on their arguments that they would suffer “reputational risk”.

“We are saying, in addition, that all the requested documents are relevant to the issues of reputational risk.

We are not just saying that these are interesting documents to have. They are crucial for the determination of the rationality, lawfulness, reasonableness, and constitutionality of the bank’s decision.

“(In terms of the) rationality issue, we say that one needs to have a look at these risk and compliance programmes and client’s due diligence rules in order, at the very least, to ascertain whether that decision to close these bank accounts is rationally related to those documents.

“So clearly then the decision to close the accounts would be sourced or informed by these documents.

“An alternative submission to this is even if it were to be found that the banks do properly source their power to close the bank accounts from these documents, the alternative argument is that those documents themselves are unconstitutional as it advances for unconstitutionality,” Ngalwana submitted.

Ngalwana said Standard Bank submitted through its legal team that the documents sought had been issued during interlocutory proceedings.

However, Sekunjalo was issued with two documents which dealt with money laundering policies, he said.

According to Standard Bank, they have 16 documents that must be read together with the two documents submitted, to which Ngalwana argued that the bank should then produce the 14 remaining documents.

Sasfin had submitted that they had a high-risk committee that made the decision and the group had sought for the memorandums of those meetings which informed the decision to close the bank accounts in terms of the reputational risk it would suffer.

Nedbank argued that the group had not made out a case to call for the documents sought as this was not brought in the main proceedings, was not necessary for purposes of pleading, and fell under the confidentiality regime.

Sekunjalo Group filed papers last year asking the court to declare that the banks’ conduct constituted unfair discrimination and that their decisions to close the group’s and its related entities’ bank accounts should be overturned.

Cape Times