SCORPIO
How the Standard Bank Fraud Centre’s serious error triggered an EFF-AfriForum war of words
A protracted tit-for-tat fight between the EFF and the civil rights organisation AfriForum highlighted what seem to be chinks in Standard Bank’s armour. It left the bank apologising to both parties after a serious error emanating from its Fraud Centre sparked indignant lawyers’ letters and a threatened defamation case.
Standard Bank admitted over the weekend that its Fraud Centre erroneously labelled two proof of payment documents the EFF had sent to AfriForum as “fraudulent”. The bank formally characterised this stunning lapse of judgement as a “misunderstanding” and neglected to point to the Fraud Centre as the spark in the powder keg.
Indications are that the “misunderstanding” is self-created. Standard Bank’s business unit for the past eight years generated pay alerts on forms with a letterhead listing directors who had resigned in 2015 in conjunction with an outdated company logo in the top left corner.
Standard Bank’s apology acknowledged “that the bank used outdated templates in isolated incidents”. This seemed to have been a major indicator to the bank’s Fraud Centre that the proof of payment could not be legitimate. Scorpio’s investigation suggests the sending of outdated templates from 2015 was not as “isolated” as Standard Bank makes it out to be.
The incident raises questions South Africa can ill afford at a time when the government is trying to prove to the global financial crime watchdog, the Financial Action Task Force, that banks and law enforcement agencies in SA are not as terrible at catching fraud, corruption and money laundering as its members made them out to be.
How the saga began
The background to this story is that the EFF’s Sandton-based legal firm Ian Levitt Attorneys sent two proof of payment notifications to AfriForum’s lawyers Hurter Spies Inc in Pretoria on Monday, 6 November. The EFF owed AfriForum R316,000 in legal costs after losing a land invasion case with costs. On the same day, AfriForum’s attorney Daniël Eloff and AfriForum CEO Kallie Kriel published the proof of payment documents on social media.
Sharp-eyed Khaya Sithole, a chartered accountant, radio host and lecturer, noticed something was wrong with the list of Standard Bank directors printed at the bottom of the proof of payment documents. The former joint chair of Standard Bank, Fred Phaswana, Sithole knew, left the bank in 2015. Yet, Phaswana’s name was on the list of directors on what the EFF and their lawyers at Ian Levitt Attorneys had offered as legitimate proof of payment documents.
Other social media users noticed more signs that the documents may have been tampered with, including an outdated Standard Bank logo on the top left of each. Worse, it seemed at the time, was that at least a handful of the EFF’s historic proof of payment documents, some dating as far back as 2020, hoisted similar suspicious red flags.
‘The below are fraudulent’
Hurter Spies Inc asked Standard Bank for confirmation that the proof of payment documents were legitimate. On Thursday morning, 9 November, Standard Bank’s Fraud Centre sent back a curt emailed message: “The below are fraudulent.”
The Standard Bank Fraud Centre’s email to AfriForum’s attorneys at Hurter Spies Inc.
The email confirmed a telephonic conversation AfriForum’s attorneys at Hurter Spies Inc had on Wednesday at 1.21pm in which the bank’s representatives first conveyed the “fraudulent” finding, Kriel told Scorpio.
AfriForum’s bank account, held at Absa, did, however, reflect the two payments of R163,441.39 and R153,138.50, totalling R316,579.89.
AfriForum consequently came to the mistaken conclusion that the EFF had “doctored” the proof of payments and published an online press release headlined: “Falsified Documents: AfriForum exposes dodgy EFF payments”.
When Scorpio in collaboration with Jean le Roux from Digital Forensic Research Lab investigated, all the above-mentioned proof of payment documents created by the EFF did indeed raise red flags. The metadata looked suspicious, too, but none raised a flag so red and large as the dated list of directors and Standard Bank logo.
For control and to test our findings, this journalist generated a Standard Bank proof of payment from a private, individual Standard Bank account. The document was correct in appearance, with the latest Standard Bank logo along with the current list of directors.
For further control, Le Roux searched online for a proof of payment document created by a Standard Bank business account. The sending and receiving parties had no link to the EFF and AfriForum and it was therefore a true yardstick against which we could measure the veracity of the EFF documents. This document, created in February 2022 and uploaded by the Knysna Municipality, looked exactly the same as the EFF’s generated proof of payment document, with an outdated logo and list of directors.
The document was independent collaboration of the EFF’s version of events.
Le Roux said, “The likely situation is that Standard Bank used a different system to generate Business Online proof of payments and their non-commercial proof of payments. While the non-commercial proof of payments had their letterheads changed to reflect the new logo and board composition, this was not applied to the Business Online letterheads.”
EFF demands apology
In the meantime, the EFF reacted with noticeable alacrity and took the opportunity to prove itself innocent.
In less than 24 hours after AfriForum’s accusation, EFF lawyer Ian Levitt was instructed to send a severe letter to the civil rights organisation demanding an apology, failing which, legal steps would be taken. Aggrieved emails were predictably exchanged.
More instructive, though, was the redacted version of the EFF’s Standard Bank statements showing the payments made to AfriForum’s lawyers which Levitt sent to Scorpio.
Extract from EFF bank account provided by Ian Levitt.
Levitt further forwarded emails which made it clear that Standard Bank’s system created and sent proof of payment documents, or “pay alerts”, to an EFF inbox labelled “statements”. From here the proofs of payment were sent to EFF treasurer Omphile Maotwe, who sent it to an attorney at Ian Levitt Attorneys.
These emails, read with the extracts of bank statements from the EFF and AfriForum, proved the EFF did pay AfriForum from the party’s main Standard Bank account.
The incident caused a stir in Standard Bank and a flurry of meetings with representatives of the EFF and AfriForum late last week and into the weekend. Just before midnight on Friday, the bank issued an apology to the EFF followed by another apology to AfriForum on Saturday afternoon.
The Standard Bank Fraud Centre, one of the bank’s crown jewels, was conspicuously absent in both apologies.
We publish Standard Bank’s full reaction below.
Standard Bank response after engagement with AfriForum.
In his second letter to AfriForum, Levitt said the EFF demanded an apology from AfriForum and lawyers Hurter Spies Inc by 1pm on Monday, 13 November. Levitt described the organisation’s accusations as “defamatory” and denied that the defence of fair comment was applicable.
“One of the legal requirements of the fair comment defence is that the facts on which the fair comment is based must be true,” Levitt said.
He quoted from the judgment in the EFF’s disastrous loss in a defamation case brought against the party by former minister Trevor Manuel and said the EFF had learnt “through bitter experience” that you cannot claim your criticism is justified when your basic facts are wrong and you did nothing to verify their accuracy.
AfriForum has deleted from its website the offending press release accusing the EFF of criminality.
Kriel told Scorpio AfriForum was happy with Standard Bank’s apology “because it is important to state that we did not lie, but relied on Standard Bank’s Fraud Centre”.
AfriForum denied “any form of defamation, and if the EFF wishes to continue with their action, we will oppose it because we do not think they will be successful in the circumstances”. DM
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I guess waiting to see if the money cleared on Monday morning – after the other guys lawyer and financial officer assured you they paid – would have been too grown up for politicians…
The question wasn’t about whether payment had been affected but rather by whom.
What an EFF-up.
Yep, pretty Sub-Standard as usual.
Why the hell did Afriforum claim the POPs were false, if the payments reflected in their account? Why did they not wait a week or so to check whether the money stays there?
Next time, make sure of your facts before going off halfcocked.
Afriforum claimed the POP’s were false because when they contacted the Standard Bank fraud department that is what Standard Bank told them in by email. Afriforum didn’t wait for the funds to clear because it isn’t about whether the money is there or not but rather about who sent it, which SB told them wasn’t the EFF. Maybe you can suggest who they should have confirmed the facts with that would have been a better source than the Standard Bank fraud department?
This is what happens when one is too much in a hurry to score political points. It’s called confirmation bias.
That’s a bit of a stretch. The ‘issue’ was pointed out to them by someone apparently knowledgeable and they sought verification from the registered financial institution which issued the proofs of payment. Hardly afriforum’s fault that SB had an ass/elbow event. The notion that the eff and it’s leadership benefit from ‘obscure’ sources of finance is far from the realms of fevered conspiracy theory
Would AfriForum have raised a “stink” had Khaya Sithole not posted the “fraudulent” proofs of payment on social media?
Me think AfriForum saw an opportunity to further tarnish EFF’s name and unfortunately Standard Bank did not help (or rather helped) matters.
It is not a stretch. Does Afriforum contact the bank for every payment that hits their account?
Next time, make sure of your facts before going off halfcocked.
The issue was not whether the payments were made, but by whom they were made. This was made clear in the original report by Afriforum. It’s quite plausible that the EFF might want to hide the identity of a benefactor.
Having dealt with SB Fraud division, I can only comment they are a bit hit and miss. But they usually do a bit better than this! Whole storm in a tea cup thing is pretty hillarious. Thanks – I needed that!
Well, we’ll see if Malema has the grace and maturity to accept the bank’s apology and not try and capitalize by more race hate rhetoric
My prediction is he will stay out but should AfriForum try to score a cheap point on another matter, well he won’t forget how quick AfriForum was to “tarnish” EFF’s name. Why didn’t “level-headed” people at AfriForum not reach out to EFF, or if they don’t trust EFF, at least EFF’s lawyers (don’t lawyers have a code of honour among themselves) if they suspected fraud – despite the money landing into their account? Where did AfriForum think the money was from?
The personality cult known by its wholly inaccurate moniker of “EFF” is doing a sterling job of tarnishing its own reputation, and hardly needs AfriForum’s aid in this context. As for a lawyers’ code of conduct, the LPC is a toothless puppy with the likes of Dali Mpofu around.
EFF are clowns but you are letting your bias against them becloud your judgement. It makes you look as clownish as they often do.
Cool, I’ll take that as a compliment. 😎
Standard Bank: “The below are fraudulent.”
Also Standard Bank: “Standard Bank denies having confirmed that any proofs of payment in relation to transactions were doctored.”
Banks in SA are of much poorer quality than than those in my native Netherlands, yet banking fees tend to be 2 to 10 times higher. Makes no sense at all.
I once had to wait a week for a Nedbank payment to clear. A week!
In The Netherlands, all domestic payments clear immediately, even if they are between different banks.
SA has some catching up to do.
The facts are clearly defamatory of the EFF – stating that they had falsely created proof that were false and verified by Standard Bank’s fraud department.
Afriforum didn’t bother to do simple log in to check that the money was deposited into its ABSA account and chose to defame the EFF instead.
I wonder if all those giving Afriforum a pass in this wil ldo the same if it was the DA paying EFF or ANC.
Logging in wouldn’t have answered the question if the payment hadn’t cleared yet. And the question was not whether the payment had been made, but by whom. AfriForum’s suspicion (which was apparently confirmed by SB) was that the EFF was trying to hide the source of the money.
The EFF must be careful on this one otherwise another payment will be on it’s way to Afriforum!!They will loose this one for sure.
What a hypocrite – Malema’s EFF in Cape Town are calling (threatening) for closure of Herzlia school because it is Jewish, but EFF’s lawyers are Jewish (and white).
Agreed. Same with LGBTQ+. You cannot accept one person who publicly identifies as LGBTQ+ then turn around to disavow the entire community.
Sure you can as Malema and his ilk have proven time and time again. The SA electorate isn’t exactly discerning with respect to the kinds of people they reward with their votes.
Not too mention Julius’s stance on the Springboks…here’s another can of worms to open… 🙂
I know we all can’t stand the EFF (and some of us can’t stand Afriforum too in addition) but the only unbiased conclusion here is that EFF is in the right and that Standard Bank messed up big time. The explanations do not exonerate them in the administrative cock-up. Afriforum are just being the usual nuisance that they always are.
Proof perhaps that we need to work harder at verifying “truth” before publishing accusations, especially when that truth seems to re-inforce our prejudices.
Why does the author insist on call Afriforum a “civil rights”organisation (at least twice in the article). What makes them a civil rights organisation?
Maybe the author approves of what Afriforum stands for.
I agree wholeheartedly with Cedric about making sure of your facts before rushing to grab a headline. This incident has tarnished both Standard Bank and Afriforum’s reputation.
This is a monumental blunder by Standard Bank. They make so many small blunders on a continuous basis that I was eventually forced to close my cheque account with them and even that process was fraught with mishaps.
There was a time when, as a corporate client, I believed that Standard Bank’s IT was world-leading. I knew a few people who worked in IT at and for the bank. Then, some years back, it seems they started pruning. I heard that staff were retrenched, outsourcing contracts trimmed. This could be the result. I guess there’s a trade-off between bottom line and technical leadership at play here.