Commercial banks tear into Iqbal Survé’s claims of collusion on the closure of his businesses’ bank accounts

SA’s largest commercial banks have defended their decision to either review or completely terminate their banking relationships with companies linked to Iqbal Survé, saying the treatment of his business empire wasn’t unusual or outside of normal banking practices, especially when dealing with high-profile and risky clients. 

And because of this, the banks — mainly Nedbank, Standard Bank, and FirstRand (owner of FNB) — want the Competition Tribunal to toss out an application brought by Survé’s companies that seeks to force the banks to temporarily reverse their decision. Other banks, including Absa, Mercantile Bank, Sasfin Bank, Investec Bank, Bidvest Bank and Access Bank have joined the court action. The Competition Tribunal acts as a court on antitrust matters. 

Survé is the chair of Sekunjalo Investments, a company that is invested in more than 30 companies, among them Independent Media, African Equity Empowerment Investments, AYO Technology and Premier Fishing & Brands. 

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Absa, in late 2020, became the first major bank to cut ties with Sekunjalo by closing the bank accounts of its entities, saying its continued association with Survé’s businesses posed “intolerable reputational, commercial, and legal risks”. 

Other banks, including Nedbank, Standard Bank, Investec, Mercantile and Sasfin, have followed in Absa’s footsteps by either reviewing their banking relationship with Sekunjalo and its entities or completely terminating it.  

This is due to the serious nature of various allegations levelled at Survé, contained in a final report by a commission of inquiry led by Judge Lex Mpati into the governance affairs of the Public Investment Corporation (PIC).   

The commission’s report found that many of the PIC’s now ill-fated multibillion-rand investments in Sekunjalo companies were not concluded based on investment merits. But the “close relationship” between the former PIC CEO Dan Matjila and Survé influenced the PIC to invest in the latter’s entities. The PIC has since launched court action against Survé and Sekunjalo to recover any monies awarded irregularly.  

Survé fires the first shot 

In December 2021, Sekunjalo lodged a complaint at the Competition Commission against nine commercial banks, accusing them of engaging in anti-competitive behaviour, abusing their dominance and breaching the Competition Act when they decided to cut ties with his companies. 

While the commission is still investigating Sekunjalo’s complaint, the company and 36 of its other entities approached the Competition Tribunal for an interim order that seeks to force FirstRand, Absa, Mercantile Bank, Sasfin Bank, Investec Bank, Bidvest Bank and Access Bank to restore its bank accounts. Sekunjalo also wants Nedbank and Standard Bank to be prohibited from terminating their relationship with the company and its other entities.  

Sekunjalo wants the bank accounts to be restored until the commission decides on whether the banks have been found guilty of violating the Competition Act. Sekunjalo believes that the Competition Commission’s investigation of its complaint against the banks will take another six months to conclude. And until then, Sekunjalo has argued, it will continue to suffer without access to banking facilities from big banks.

Hearings for the interim order application at the Competition Tribunal by Sekunjalo and its other companies started on Monday and will run until Tuesday, 8 March. 

Advocate Vuyani Ngalwana, acting for Sekunjalo and its other entities, accused the banks of coordinating their discussions and behaviour in terminating the bank accounts of Surve’s businesses — a “sign” that banks allegedly colluded and fell foul of the law, mainly the Competition Act.

Ngalwana also took umbrage at the fact that the PIC is invested in most of the commercial banks. He argued that the banks, with the PIC (which is suing Sekunjalo), have a common interest in seeing banking facilities being denied to Sekunjalo, a “black-owned and managed company”. 

“Sekunjalo has not been charged with money laundering or terrorism but it is being subjected to economic strangulation because bad things have been written about the company by rival media. Banks don’t like Dr Survé and are flexing their muscles for sinister goals, hampering transformation and Sekunjalo’s contribution to the economy,” Ngalwana argued.  

Banks hit back 

Three banks — Nedbank, Standard Bank and FirstRand — responded to Ngalwana’s arguments during the Competition Tribunal hearing. Advocate Alfred Cockrell, acting for Nedbank, said Sekunjalo has not provided “a shred of evidence” to suggest that Nedbank had worked with other banks to review its relationship with Survé’s businesses. 

“Nedbank made the decision to close the accounts independently. The bank didn’t have discussions with other banks. There is no shred of evidence to suggest collusion or cooperation with other banks,” said Cockrell. 

He said Nedbank’s decision to cut ties with Survé’s empire is part of the exercise by banks to assess the risk of their clients — an exercise conducted on all clients regardless of whether they are big or small. 

Advocate Steven Budlender, acting for Standard Bank, and advocate Penny Bosman, acting for FirstRand, rejected Ngalwana’s suggestion that the PIC had influenced the decision by banks to not offer new banking facilities to Sekunjalo and its entities. The PIC holds about 14% in Standard Bank and 14.7% in FirstRand. Budlender and Bosman argued that this level of PIC shareholding was not enough to influence the operational decisions of the respective banks.  

Budlender and Bosman argued that Sekujalo and its companies have not been harmed by the decisions of the banks. After all, Sekujalo and its companies have managed to remain in business and have managed to find other ways to facilitate banking transactions, despite Absa being the first bank to deny it banking services, in late 2020. DM/BM