Iqbal Surv\u00e9 has suffered yet another existential setback with three of the \u201cbig four\u201d banks now refusing to do business with any company tied to him and his Sekunjalo Investment Holdings.<\/p>\n
The Sekunjalo companies received notice from Nedbank\u00a015 November last year, more than a year after Absa, in late 2020, became the first major South African bank to cut ties as first revealed here<\/a>.<\/p>\n Read: Absa does a Gupts on Iqbal Surv\u00e9<\/a><\/em><\/p><\/blockquote>\n FNB followed suit in March last year but the true extent of Surv\u00e9\u2019s banking woes have only now become clear due to his failed bid to interdict Nedbank\u2019s account closures\u00a0\u2014\u00a0<\/span>which was dismissed in the Western Cape High Court this week. It was his third defeat after also attempting to challenge Absa and FNB.<\/p>\n Read: Another bank abandons Iqbal Surv\u00e9<\/a><\/em><\/p><\/blockquote>\n According to court papers Investec started closing Sekunjalo accounts in April last year. In May Mercantile Bank as well as Sasfin followed suit.<\/p>\n Additionally, a total of 28 banks and representative offices of foreign banks have turned down Sekunjalo\u2019s business, making the banking sector\u2019s boycott very nearly universal.<\/p>\n The first of the Nedbank closures came into effect on Tuesday, while others will kick in between now and May, progressively pulling the rug out from under most of Surv\u00e9\u2019s private holdings but also his major JSE listed companies and their subsidiaries.<\/p>\n That includes the JSE-listed African Equity Empowerment Investments, Premier Fishing and Brands\u00a0\u2014\u00a0<\/span>and the jewel in the crown, the cash-flush Ayo Technology Solutions, which is still clinging to the remainder of the R4.3-billion irregularly invested in it by the Public Investment Corporation (PIC) in late 2017. At last count this was down to R2.16-billion.<\/p>\n Ayo did not have a Nedbank account in its own right although its subsidiaries and parent company which did have Nedbank accounts have lost these. According to court papers Ayo has also tried and failed to find new banking facilities since FNB closed its accounts last year.\u00a0In an affidavit Surv\u00e9 claimed that \u201cAYO is only in business because some of its subsidiaries still have banking facilities which are themselves in danger of being closed\u201d.<\/p>\n Its executives have been intimately involved in unsuccessful negotiations with Nedbank.<\/p>\n Judging by the last published financial statements of Surv\u00e9\u2019s JSE-listed companies only Standard Bank still provided significant banking facilities at the end of August last year. The group had R1.17-billion parked there while large chunks of the Ayo cash had been moved out of the banking system and given to asset managers, principally Ninety One Fund Managers and a \u201cboutique\u201d manager Numus Capital.<\/p>\n According to an affidavit by Surv\u00e9, Standard Bank has also put all its Sekunjalo accounts under review and is no longer opening new accounts for entities in the group, possibly presaging a final wave of account closures that would see Sekunjalo painted into a fatal corner in the same way the Gupta empire was between 2016 and 2017.<\/p>\n The group is now attempting to use third-party payment agents but has already discovered the limitations of this approach.<\/p>\n Among the court papers is a letter from Discovery directed at Ayo subsidiary Puleng Technologies demonstrating how this solution may be roundly rejected\u00a0\u2014 and how the bank boycott will have a devastating cascading effect.<\/p>\n It noted, \u201cDiscovery, being a registered financial services provider operating within highly regulated parameters, unfortunately cannot accept any of the payment options as these may potentially expose us to legal and regulatory consequences\u2026This letter serves as our notice of early termination of all Agreements, and\/or cancellation of Purchase orders as applicable.\u201d<\/p>\n Why Nedbank is dumping Surv\u00e9<\/strong><\/p>\n Like Absa and FNB before it, Nedbank is arguing that the mere association with Surv\u00e9 \u201cposes reputational and association risks\u201d.<\/p>\n The bank cites the serious ongoing allegations against him in the media, the several ongoing court cases against his companies as well as scathing findings in the report of the Judicial Commission of Inquiry into the Public Investment Corporation, commonly known as the Mpati Commission.<\/p>\n The Nedbank papers however go far deeper than that.<\/p>\n For the first time court proceedings have exposed some of the internal workings of Surv\u00e9\u2019s empire. A multitude of suspicious or unexplained transaction queries were attached to an affidavit by Nedbank Chief Legal Counsel Zanele Mngadi \u2013 alongside Sekunjalo responses that Nedbank in some instances labeled \u201codd\u201d or \u201cunsatisfactory\u201d.<\/p>\n Some involve what at first glance appears to be the use of company funds for personal affairs, while others involved politically exposed persons receiving \u201cloans\u201d or \u201cdonations\u201d.<\/p>\n One particularly suspicious transaction was the transfer of R25-million from the African News Agency (ANA) to Surv\u00e9\u2019s personal account, which Sekunjalo initially said was to fund Surv\u00e9\u2019s divorce settlement in August 2016.<\/p>\n See the full correspondence here<\/a>.<\/em><\/p><\/blockquote>\n The court records show that\u00a0 on 28 July last year Nedbank addressed a letter to the news service, which was launched in 2015 to replace the defunct South African Press Agency. From the outset ANA\u2019s main asset was the astounding R357-million cash paid by the China Africa Development Fund for a mere 5% shareholding in the fledgling company.<\/p>\n \u201cR25 Million was paid by Africa News Agency to Dr Surve’s personal account as a payment\u00a0towards his divorce settlement. Why did Africa News Agency fund this settlement?\u201d Nedbank enquired.<\/p>\n Surv\u00e9\u2019s sister (and Sekunjalo executive) Aziza Amod replied:<\/p>\n \u201cDr Surve was concerned that some of the requested information in the letter is private and confidential. He indicated that he would send you an email separately about this confidential information.\u201d<\/p>\n The same day Surv\u00e9 wrote to Nedbank that his sister had gotten it wrong and that the payment into his personal account was actually \u201cin lieu of an intercompany loan between ANA and Sekunjalo Investment Holdings.\u201d<\/p>\n \u201cFor the record Aziza indicated at no stage did she mention a divorce settlement,\u201d Surv\u00e9 added.<\/p>\n That was untrue. An email Aziza sent to Nedbank on 15 April in response to Nedbank\u2019s initial query clearly labels the transaction, \u201cDr Ml Surve: settlement agreement spouse\u201d.<\/p>\n “If this was truly an intercompany loan, why was it paid into Dr Surve’s personal account.Furthermore, no intercompany loan agreements were furnished to Nedbank in support of the explanation provided,\u201d Mngadi said in her affidavit.<\/p>\n This was a repeated complaint\u00a0\u2014\u00a0<\/span>a multitude of supposed intercompany loans with no backing documents.<\/p>\n In June 2017 ANA gave Sekunjalo a R20-million loan, Amod told Mngadi by email.<\/p>\n In August 2018 ANA paid R41,3-million to Premier Fishing. The first time Nedbank queried this the response was that it was a \u201cpayment to PF for share allocation in Private Equity Fund\u201d.<\/p>\n The second time it was queried the answer changed to \u201cThis payment was transferred in error to PFSA. Upon enquiry to ANA, ANA informed PFSA that the payment was meant for AEEI. PFSA on the same day transferred the funds to AEEI\u201d.<\/p>\n Even on this version ANA money was seemingly being invested with another part of the Surv\u00e9 empire.<\/p>\n On Surv\u00e9\u2019s version these intercompany transfers were above board transactions in the normal course of business, driven mainly by centralised treasury and other services performed for different parts of the Sekunjalo group.<\/p>\n AmaBhungane investigations have impact. We won\u2019t stop exposing wrongdoing and holding government and corporate institutions to account. But we cannot do it without your support<\/a>.<\/i><\/em><\/p>\n Big and small<\/strong><\/p>\n Some of the transactions flagged by Nedbank were not very large but politically sensitive.<\/p>\n Transactions from one of Sekunjalo\u2019s accounts included two payments totaling R30\u00a0000 to former ANC spokesman Carl Niehaus. When questioned Amod replied that \u201cMr Niehaus has requested loans on numerous occasions for help to deal with financial distress and family matters. This was most likely a loan\/donation to assist him\u201d.<\/p>\n Niehaus\u2019s longstanding money troubles are a matter of public record.<\/p>\n There were a number of similar small payments to other individuals which Amod vaguely referred to as loans \u201cor\u201d donations.<\/p>\n In April 2018 Surv\u00e9\u2019s 3 Laws Capital, flush with Ayo cash, made a R200\u00a0000 payment labelled as \u201cTMJ Pettersson loan\u201d \u2013 referencing former energy minister Tina Joemat-Pettersson whose middle name is Monica.<\/p>\n Joemat-Pettersson told amaBhungane it was a formal loan backed by a written agreement which she has repaid. The loan was a financial bridge during the gap in her employment as an MP between 2017 and 2019, she said.<\/p>\n Among other payments cited by Nedbank are five totaling R125 000 made to former ANC and COPE MP Phillip Dexter in 2013. When queried about these Sekunjalo claimed they were loans for Dexter\u2019s post-graduate studies.<\/p>\n Dexter however denies this.<\/p>\n \u201cThere was never any loan. They hired me as a consultant and I did work for them for a short period of about six months,\u201d he told amaBhungane.<\/p>\n \u201cI confirm that I was contracted by Sekunjalo to do certain communications work for them but I did not complete the contract contract due to a difference of values that emerged as the nature of the work was detailed to me.\u201d<\/p>\n Judge for yourself \u2013 or maybe not<\/strong><\/p>\n It appears from the court papers that Surv\u00e9 shot himself in the foot during the negotiations with Nedbank to keep the accounts open by first trumpeting a new independent forensic appraisal of his companies\u00a0\u2014\u00a0<\/span>but then burying it.<\/p>\n He has repeatedly railed against the Mpati Commission where former executives gave damning testimony against him and Sekunjalo companies funded by the PIC. The final report by judge Lex Mpati was released in march 2020 and was scathing about the \u201cmalfeasance\u201d of Surve\u2019s group. Absa, FNB and Nedbank all cited this commission when closing accounts.<\/p>\n In the papers Surv\u00e9 reveals that Sekunjalo appointed retired judge Willem Heath to \u201cprovide an impartial and independent factual findings report in relation to the Mpati Commission and the Sekunjalo Group\u201d.<\/p>\n In a personal letter dated 12 November Surv\u00e9 promised Nedbank chief executive officer Mike Brown full transparency.<\/p>\n \u201cWe have\u2026informed the judge that whatever the outcome of the report, firstly we will abide by the outcome and recommendations and secondly make the report avallable to the boards of directors of the companies affected. We also intend to make the report available to all of our advisers and our bankers.\u201d<\/p>\n Nedbank wrote back saying while it welcomed such a report this should \u201cnot be interpreted to mean that Nedbank would consider same prior to closing the respective bank accounts\u201d.<\/p>\n The point became academic because when Heath produced an interim report Sekunjalo promptly buried it.<\/p>\n \u201cThe Sekunjalo Group is now in receipt of the interim report and in considering the report, have decided to invoke principle of privilege,\u201d Surv\u00e9 wrote to Brown in a new letter dated 5 January.<\/p>\n In her answering affidavit Mngadi called this decision \u201codd\u201d.<\/p>\n If you like this story and want more, subscribe to our <\/em>newsletter<\/a><\/u><\/em> and be the first to get our latest news and investigations.<\/em><\/p>\n Plan B and Plan C<\/strong><\/p>\n Surv\u00e9\u2019s latest court application was intended to buy time for two new attacks on the banks to come to fruition.<\/p>\n The beleaguered media mogul is simultaneously taking his fightback campaign to the Competition Commission and the Equality Court.<\/p>\n At the commission his companies will argue that Nedbank and another eight banks \u201ccolluded in an attempt to force the Sekunjalo Group of companies to stop trading by not only terminating their existing banking facilities but also by denying them access to any banking facilities completely\u201d.<\/p>\n In the crosshairs are Absa, FNB, Nedbank, Standard Bank, Mercantile, Sasfin, Investec, Bidvest and Access Bank.<\/p>\n Pending the commission\u2019s investigation, Sekunjalo has approached the Competition Tribunal for an interdict to halt and reverse the account closures. This application is set to be heard on 7 and 8 March.<\/p>\n At the Equality Court Surv\u00e9 will argue that banks are racist for closing his companies\u2019 accounts but not those of \u201cwhite\u201d groups like Steinhoff, Tongaat Hulett and EOH, where there have been massive accounting fraud scandals.<\/p>\n All those companies, however, have been placed under new management.<\/p>\n Nedbank invoked client confidentiality when asked about these specific companies but told amaBhungane that \u201cwith reference to public information\u2026each of these entities has taken remedial action and if they do hold accounts with Nedbank, they would have been subject to the same Nedbank processes as any other clients\u201d.<\/p>\n \u201cDecisions to terminate banking relationships with clients are neither arbitrary nor discriminatory\u2026Race in not a consideration in any way in these decision processes.\u201d<\/p>\n The racism attack has been a mainstay of Surv\u00e9\u2019s public campaign against his detractors, a campaign largely executed through the newspapers owned by his Independent Media.<\/p>\n In a statement carried by Independent Online on Wednesday Surv\u00e9 said, \u201cSekunjalo is being targeted in a proxy battle for control of the media. Banks are being used to close Sekunjalo Group accounts to destabilise the Group, with what we believe to be the aim as being the complete destruction of Independent Media.\u201d<\/p>\n Judge Matthew Francis ruled that the Equality Court and the Competition Tribunal had exclusive jurisdiction on the matters referred to them by the Surv\u00e9 applicants, to the exclusion of the High Court.<\/p>\n However, he did not dismiss out of hand Surv\u00e9\u2019s claims of victimization.<\/p>\n Sekunjalo had requested that the banks accede to moving the tribunal hearing forward to before this week\u2019s account closures but the banks had refused.<\/p>\n The judge viewed this as a \u201ccynical\u201d move.<\/p>\n \u201cNedbank, somewhat ironically, appears to have engaged precisely in the type of behaviour complained of by the applicants – the collective power of the banks appears to have been employed to stall the appropriate forum from timeously considering an application that is obviously of great importance to all the parties concerned.\u201d<\/p>\n The 43 different Surv\u00e9 entities will see their Nedbank accounts closed on different dates: seven this week, two more next week, twenty-four on 15 March and ten on 9 May.<\/p>\n In its letters to the Sekunjalo companies Nedbank explained that \u201cany funds held in credit in the accounts would be transferred to a Nedbank suspense account, where no interest will be earned and will be held there until such time that (the applicant) provides (Nedbank) with specific instructions to transfer or withdraw the funds”<\/p>\n With the Nedbank accounts being closed and other banks seemingly poised to follow suit, Surv\u00e9\u2019s empire is racing against time.<\/p>\n <\/p>\n Read more stories on Iqbal Surv\u00e9 and Ayo<\/strong><\/p>\n PIC looks on while \u2018Surv\u00e9 Inc\u2019 burns through state pensioners\u2019 billions<\/a><\/p>\n Iqbal Surv\u00e9 takes another bite at the PIC apple<\/a><\/p>\n