Standard Bank has acted fast, following a recent ruling by the Competition Appeal Court (CAC) which sets aside an interim order granted by the Competition Tribunal obliging it, with seven other banks, to reinstate or maintain bank accounts for companies within the Sekunjalo Group.

Last year, the Competition Tribunal found that in refusing to deal with the Sekunjalo entities, Standard Bank (and other banks) had acted unilaterally as dominant firms. Standard Bank, with Mercantile Bank and Access Bank, appealed against the decision and on Monday won the appeal.

The Competition Appeal Court found that:

• There was no evidence that any of the banks directly coordinated with one another in refusing to deal with the Sekunjalo Group. Indeed, Standard Bank had not yet decided to refuse banking services at the time the application was heard.
• There was no legal or factual basis to find that the three banks had contravened the Competition Act. For that reason, the CAC held that no order for interim relief should have been granted against Standard Bank by the Competition Tribunal.

In an emailed statement, Standard Bank said it was “pleased with the judgment which confirms (our) position since inception, that we have not been involved in any anti-competitive behaviour as alleged. Following the favourable judgment, Standard Bank is engaging with the Sekunjalo Group on the next steps.”

Pulling the plug on accounts

While Sekunjalo did not comment on the ruling, Independent Media chief executive Takudzwa Hove sent out a message to staff notifying them that the Competition Appeal Court had “unfortunately and shockingly” overturned a previous decision by the Competition Tribunal on the closure of bank accounts related to the Sekunjalo group.

“We have subsequently received communication from Standard Bank that Independent Media’s account will be terminated by (Monday), 21 August 2023,” Hove said.

Independent Media staff have been assured that “management is also working on securing alternative transactional arrangements”.

According to Hove, the (Sekunjalo) group maintains that the decision by the banks is political and part of a broader political attack.

An Independent Media article published earlier this week states that Standard Bank issued letters to Independent Media and 30 other companies in the Sekunjalo stable, indicating that their bank accounts would be closed by 21 August. However, Standard Bank declined to comment on the number of bank accounts that would be closed.

The dispute dates back to March 2020 when the Mpati Commission raised questions about the relationship between the Public Investment Corporation (PIC) and Sekunjalo; and a subsequent PIC investment in Ayo Technology.

The banking industry was quick to respond.

By 27 August 2020 Absa, which was the Sekunjalo Group’s primary banker, gave notice that it would close its accounts. Absa then closed several Sekunjalo-related accounts on 27 February 2021.

Over the next 15 months, eight other banks either closed the accounts of some Sekunjalo entities, refused to onboard new accounts, or indicated that the accounts were under review.

The eight banks that followed in Absa’s footsteps were Standard Bank, Mercantile Bank, Access Bank, Nedbank, First Rand, Sasfin Bank, Investec Bank and Bidvest Bank.

Within 15 months, all the banks had either terminated their relationships with entities in the Sekunjalo Group or, when approached to provide banking services, had refused to do so. However, the Competition Appeal Court found no evidence that the banks had directly coordinated with each other.

“The strongest evidence of the regard that any of the banks had to the actions of the others came from Access Bank’s internal emails. These suggest that the bank’s officials had regard to the actions of other banks when considering their position in providing services to one of the Sekunjalo entities,” the CAC ruling states, noting that “firms may frequently have regard to the approach taken by rivals but that, at best, is conscious parallelism, not parallel behaviour, and the two should not be confused”. DM