Conspiracy 1: the PIC<\/strong><\/p>\nThe PIC in many ways summoned Surv\u00e9\u2019s conglomerate into being with repeated investments over the years totalling several billion rands.<\/p>\n
The state-owned asset manager funded his takeover of Independent Media in 2013. It was the main subscriber in shares when Surv\u00e9 listed Premier Fishing & Brands in 2017. Then it made a highly irregular investment of R4.3-billion in Ayo Technology Solutions later in the same year. It was by all accounts set to give Surv\u00e9 billions more in 2018 when he tried, and failed, to list Sagarmatha Technologies.<\/p>\n
The relationship has since soured.<\/p>\n
The PIC is now trying to liquidate the company through which Surv\u00e9 took control of Independent after it defaulted on loan repayments.<\/p>\n
The PIC is also trying to recover the billions it stuck in Ayo, which would effectively smash Surv\u00e9\u2019s piggybank.<\/p>\n
Despite the PIC seeming to proceed with these legal steps somewhat reluctantly and at a snail\u2019s pace, Surv\u00e9 appears convinced the organisation is out to get him by other means.<\/p>\n
\u201cIt is quite possible that the PIC may have lobbied the banks to close the bank accounts of the applicants. The PIC is a substantial shareholder in most of the banks,\u201d said Surv\u00e9 in his affidavit.<\/p>\n
Elsewhere Surv\u00e9 refers to \u201cour view that this is the PIC behind this\u201d.<\/p>\n
During the hearing of the matter Sekunjalo\u2019s counsel Advocate Vuyani Ngalwana backtracked slightly in response to a question from the Tribunal\u2019s chair Mondo Mazwai:<\/p>\n
\u201cNo, chair, we are not saying the PIC controls the banks, we are saying\u2026that an agreement to engage in prohibited horizontal conduct is presumed if the firms involved have a substantial shareholder in common. We don\u2019t take it any further than that.\u201d<\/p>\n
He then however went further anyway, getting to the crux of the theory.<\/p>\n
\u201cWe are saying that the banks, because they have this substantial shareholder in common, they have an interest in the success of the PIC\u2019s litigation against Ayo. And so they will do everything in their power to ensure that anything that goes against the PIC is thwarted. We don\u2019t take it any further than that chair.\u201d<\/p>\n
Ayo is to a large extent the reason Surv\u00e9 has found himself in his current situation after investigative reporters and ultimately the Mpati Commission of Inquiry revealed massive irregularities with the PIC investment in Ayo.<\/p>\n
The PIC does own minority stakes of between 6% and 14% in all the banks, or at least the JSE-listed ones.<\/p>\n
It\u2019s not clear if that counts as \u201csubstantial\u201d and, as at least one bank has pointed out, the PIC has no representatives on any bank\u2019s board and Surv\u00e9 produced no evidence to back up his allegations.<\/p>\n
Conspiracy 2: the regulator<\/strong><\/p>\nAccording to Surv\u00e9\u2019s affidavits even the South African Reserve Bank (SARB) and its Prudential Authority (PA) are party to the conspiracy to destroy Sekunjalo.<\/p>\n
Here he makes some of the most serious allegations in his lengthy court papers, including those recently filed at the Equality Court.<\/p>\n
In his Equality Court affidavit he claims that \u201chighly placed sources within ABSA Bank and FNB have said that the Prudential Authority or the Reserve Bank has signaled to all of them [banks] to shut down the Sekunjalo Group companies accounts.\u201d<\/p>\n
In his Tribunal papers he cites the same allegations.<\/p>\n
\u201cThe Commission should be given an opportunity to investigate the veracity of the allegations that compliance officers of the respondent banks have worked closely with the Prudential Authority to unbank Sekunjalo. This has been widely reported to us and our company executives in our engagement.\u201d<\/p>\n
\u201cI have written to the Prudential Authority requesting that they clarify if indeed this is the case and on which basis they would flag our group. They have denied this involvement, but only the Commission has the power to investigate this further.\u201d<\/p>\n
In a response to amaBhungane questions, the Authority said, \u201cThe PA denies the allegation which is without any basis or evidence.\u201d<\/p>\n
Citing a November 16, 2021, letter PA chief executive Kuben Naidoo had written to Surv\u00e9, the PA told amaBhungane, \u201cMr Kuben Naidoo\u2019s letter\u2026 stated that the PA had not discussed Sekunjalo Group\u2019s accounts with any bank or banker or other third party, however, should Mr Surv\u00e9 have any such evidence he was welcome to share it with Mr Naidoo.\u201d<\/p>\n
Surv\u00e9 also claimed in his affidavit that Naidoo had told the Sekunjalo Group that banks could only close accounts when they were used for illicit financial flows, or to finance terrorism, or for purposes of money laundering.<\/p>\n
In response the PA said this was not accurate and that Naidoo had explained in writing that the PA had \u201cno power to intervene on behalf of a customer, company or private individual in their relationship with their bank or any other financial services provider\u201d.<\/p>\n
\u201cBanks must comply with the law when they close accounts. The courts have clarified that as a regulator the PA has no role to play in this regard, as the relationship between the client and its bank is private, unless banks are discriminatory in their application of the law. If the aggrieved party is of the view that the banks are breaking the law or are practising discrimination, then they must go to the courts or the FSCA [Financial Sector Conduct Authority].\u201d<\/p>\n
Conspiracy 3: racist banks<\/strong><\/p>\nAnti-competitive conduct normally aims to raise prices or exclude competitors but Surv\u00e9 says that \u201cin this instance, the purpose of the coordinated conduct by the respondent is to remove the participation of firms that are owned by historically disadvantaged persons\u201d.<\/p>\n
Ngalwana also expanded on the banks\u2019 alleged \u201ccommon policy\u201d, which is to \u201cremove black companies from the economy that are in competition with the banks customers in predominantly white owned spaces\u201d.<\/p>\n
He provided no evidence for this claim, but it is a mainstay of Surv\u00e9\u2019s argument in his court papers, but also in the sustained campaign against critics waged through Independent Newspapers, that he is the victim of a racist establishment.<\/p>\n
A supposedly grassroots #racistbanksmustfall campaign has sprung up and appears heavily invested in Sekunjalo\u2019s fate.<\/p>\n
It held a march in Cape Town this week marking a preliminary procedural hearing in the Equality Court where Nedbank was ordered to maintain Surv\u00e9\u2019s accounts for at least three more weeks.<\/p>\n
The movement, according to its paraphernalia, is concerned with how poor black people and aspiring black businesspeople are blackballed by banks.<\/p>\n
Surv\u00e9 is a strange champion for this cause.<\/p>\n
As a very rich man with his personal wealth in 2007 declared to be R1.26-billion, Surv\u00e9 was, until recently, very well served by the banks he is now battling in court.<\/p>\n
His numerous mortgages and personal credit facilities totalling well over R100-million are detailed in the court papers while his companies\u2019 multi-million facilities with various banks are detailed in their financial statements.<\/p>\n
Still, the fact that Sekunjalo is black is itself now the argument for authorities to shield it.<\/p>\n
\u201cI am\u2026advised that the conduct of the respondents engages constitutional values of equality and freedom. A refusal to provide banking and payment services to a black owned and black controlled firm is one of the worst infringements of this equality and freedom. It undermines the transformation and economic redress project that is central to our Constitution and competition law,\u201d Surv\u00e9 says in his papers.<\/p>\n
More importantly, his argument is that \u201cwhite\u201d companies that have done worse things than what he is alleged to have done still have accounts with the banks boycotting him.<\/p>\n
His primary examples are Steinhoff, Tongaat Hulett and EOH\u00a0\u2014\u00a0all of which had executives carry out grotesque accounting fraud leading to billions of rands in value destruction when discovered.<\/p>\n
The position of the banks is that all these companies fired their executives and underwent large-scale investigations to clean up the rot.<\/p>\n
In turn the banks have aired Surv\u00e9\u2019s personal financial affairs in court papers and, particularly in the case of Investec, strongly suggested that he has funded his personal assets with money leeched from Ayo.<\/p>\n
For Surv\u00e9 this is more evidence of racism: \u201cTo emphasise the discriminatory practices of these respondents they accept that conglomerates that are white are able to transfer funds between companies but because we are a black conglomerate this is somehow irregular. The inherent racism and hypocrisy is mind boggling.<\/p>\n
\u201cThe respondents try and pollute this case by referring to transfers to beneficiaries of the family trust, the Haraas Trust, such as family members, and refer to expenditure to certain credit card items. This is designed to embarrass me\u2026<\/p>\n
\u201cThere is something inherently racist about this, as they would never question the right of someone who has such a portfolio who is white,\u201d he says.<\/p>\n
Conspiracy 4: #Stratcom<\/strong><\/p>\nSurv\u00e9 makes much of the fact that many of the banks relied on media reports when pleading reputational damage, including not a few amaBhungane ones.<\/p>\n
This dovetails with Surv\u00e9\u2019s long war of words with his perceived mortal enemies: us and rival media in general.<\/p>\n
Full disclosure: Surv\u00e9 is currently suing the author of this article jointly with our publishing partner Daily Maverick for R3-million.<\/p>\n
The summons cites two articles from more than a year earlier but is vague about what we got wrong.<\/p>\n
Surv\u00e9 has not demonstrated any significant error in our coverage and it has also long been Sekunjalo\u2019s policy to ignore media queries from us.<\/p>\n
At the Tribunal he has complained about how \u201cthe executive director of amaBhungane is on record, on radio, television, online and in print along with other editorial people at amaBhungane in publicly stating their hatred for myself and their determination to destroy Sekunjalo and Independent Media\u201d.<\/p>\n
He unfortunately fails to provide a reference.<\/p>\n
Surv\u00e9\u2019s newspapers have also made a vast array of accusations about Daily Maverick proprietor and editor Branko Brkic, even suggesting that he has some vicarious case to answer for ethnic cleansing in Serbia in 1992.<\/p>\n
In his affidavits Surv\u00e9 also resurrects a theory of his that hedge funds and asset managers worked with journalists to short the shares of Ayo \u2013 suggesting this was the \u201creal\u201d reason the shares became nearly worthless.<\/p>\n
\u201cThey (funds) worked in concert with journalists and guest writers in media publications that are competitors of Independent Media and detractors of Sekunjalo,\u201d he says.<\/p>\n
He omits to mention that a case of market manipulation is in fact being investigated by the Financial Sector Conduct Authority \u2013 against him, for possibly manipulating the Ayo share price upwards.<\/p>\n
Gupta precedent<\/strong><\/p>\nOnce we step away from Surv\u00e9\u2019s rhetoric, the question remains as to whether the banks\u2019 actions are justified.<\/p>\n
The only comparable precedent to what Surv\u00e9 is going through is the unbanking of the Gupta family in 2016.<\/p>\n
The banks can more than anyone else be celebrated rightly as the ones who ultimately sent the infamous brothers and their coterie packing.<\/p>\n
Back then President Jacob Zuma dispatched cabinet ministers to twist banks\u2019 arms and threaten an inquiry.<\/p>\n
But even at the height of state capture political pressure proved incapable of forcing the banks to back off, despite the fact that, as their friends in the \u201cRET\u201d trenches liked to point out, the Guptas were convicted of no crime.<\/p>\n
Neither has Surv\u00e9, despite an array of questionable dealings.<\/p>\n
Few will mourn this kind of devastating un-banking when it comes to national \u2018villains\u2019.<\/p>\n
Banking the disreputable can invite censure from international correspondent banks and both local and international authorities, which is part of the case the banks are making.<\/p>\n
So the competition authorities being asked to very possibly force banks to transgress regulations in what is rightly the most regulated industry of all. That\u2019s clearly not a great idea.<\/p>\n
But what about other clients?<\/strong><\/p>\nThe banks are fundamentally relying on the assertion that, whether or not Surv\u00e9 is guilty of anything, they have an inalienable right to not do business with him.<\/p>\n
It is after all in the contract he and everyone else for that matter signed when they opened bank accounts.<\/p>\n
But the issue might be more complicated than that, as the competition authority suggests in an affidavit by Commission legal counsel Luke Rennie.<\/p>\n
He told the Tribunal, \u201cI submit that the exercise of contractual rights can, and often does, in appropriate circumstances, give rise to competition concerns\u2026 for example, if the exercise of contractual rights is a function of market power or the relevant terms of the contract are a manifestation of market power.\u201d<\/p>\n
That feels like a point worth taking up.<\/p>\n
If only Surv\u00e9 could stick to arguments like these.<\/p>\n","protected":false},"excerpt":{"rendered":"
In a desperate attempt to regain access to the banking system the media mogul has cast the net of his alleged enemies ever wider and more wildly. But even if there\u2019s not really an economy-wide plot against him, the de facto boycott threatening his shrinking empire still raises real questions about the power of the banks. <\/p>\n","protected":false},"author":8,"featured_media":20862,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[2],"tags":[362,908,909,239,910,911,755,52,870,367,852,259,369,142],"class_list":["post-15763","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stories","tag-absa","tag-access-bank","tag-bidvest-bank","tag-capitec","tag-competition-tribunal","tag-firstrand","tag-investec","tag-iqbal-surve","tag-mercantile-bank","tag-nedbank","tag-sasfin-bank","tag-sekunjalo","tag-standard-bank","tag-surve"],"acf":[],"_links":{"self":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/15763","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/comments?post=15763"}],"version-history":[{"count":1,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/15763\/revisions"}],"predecessor-version":[{"id":29915,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/15763\/revisions\/29915"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/media\/20862"}],"wp:attachment":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/media?parent=15763"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/categories?post=15763"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/tags?post=15763"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}