NEDBANK has suffered the first blow in what has been described as a David and Goliath-like legal battle after the Equality Court sitting in the Western Cape High Court granted the Sekunjalo Group an urgent interdict, with costs, barring the bank from closing any of the companies’ accounts.
The bank was also ordered to reopen the companies’ bank accounts that may have been closed.
The group had turned to the Equality Court for an interdict after Nedbank issued it with a notice to terminate its banking facilities, claiming it had suffered reputational damage in banking accounts associated with Sekunjalo Investment Holdings chairman, Dr Iqbal Survé, and allied companies within the group.
The court found that Sekunjalo had been prejudiced by the decisions to unbank the group.
Sekunjalo’s legal representative, advocate Vuyani Ngalwana SC, had argued that the bank had not disputed the fact that it had discriminated against Sekunjalo based on race as it had not taken the same action against white-owned companies – an argument the bank said was “utterly devoid of merit and entirely unsubstantiated”.
Judge Mokgoatji Dolamo found that Sekunjalo had a prima facie case of discrimination, and that Nedbank had treated it differently to the likes of the Steinhoff Group, Tongaat Hulett, EOH Limited, etc.
He also found that Sekunjalo and its entities would suffer irreparable harm if their accounts were to be closed, something Nedbank sought to diminish in its technical representations to the court.
The judge said that pending the final determination of Sekunjalo’s main Equality Court application, any of its accounts that had already been closed at the time of the hearing of the application should be reopened with immediate effect.
“Should the applicants be successful in the main Equality Court proceedings, they will seek orders directing the respondents to take specific steps to stop the alleged unfair discrimination and harassment directed at them (and that) such measures are to include the reinstatement and/or maintenance of the applicant’s banking facilities and related services until such time that the respondents will have provided rational and lawful reasons acceptable to the Equality Court for the termination of those banking facilities and services.
“For present purposes, however, the applicants seek an order preserving and restoring the status quo pending the final determination of the parties rights,” said Judge Dolamo.
Reacting to the decision, Survé said: “This is a resounding victory for not only Sekunjalo and its Group of Companies, but for all South Africans who have faced any form of discrimination by the banking fraternity. I would like to thank my colleagues, and the teams who have worked tirelessly on preparing for this case and fighting the prejudices of the past that still make themselves felt in the present, for all their effort and their support. This is one step closer to realising an equal society for all in South Africa at last.”
Godrich Gardee, the attorney for the group and others in the matter, said: “This confirms our grounds of application to be intervenors, an application granted last week on Tuesday. We look forward to developing the common law contract of banking relationship between clients and banks.”
A Nedbank spokesperson said they noted the judgment and “no permanent finding has been granted”.
“Temporary interdicts are a common procedural remedy pending a full examination of the parties’ rights and all relevant facts in due course. No permanent finding has been granted at this stage.
“Nedbank will abide by this decision but will continue its rigorous defence of all matters, based on the legal merits and facts and stands by its position.
“Nedbank is bound by client confidentiality and is unable to discuss clients with third parties. It bears noting, however, that decisions to terminate banking relationships with clients are neither arbitrary nor discriminatory, and are taken extremely seriously as clients are the essence of Nedbank’s business.
“The continued banking relationship with the Sekunjalo group, as ordered by the Equality Court, will continue to be subject to all regulatory requirements of the Banks Act and the Financial Intelligence Centre Act (FICA).”