Top court rejects Sekunjalo bid to revive bank case

The Constitutional Court has denied a bid for leave to appeal launched by more than 200 companies in Iqbal Survé’s investment stable, Sekunjalo, to reverse Nedbank’s decision to terminate the companies’ accounts due to concerns over reputational risks.

“The Constitutional Court has considered the application for leave to appeal. It has concluded the application should be dismissed with costs as it bears no reasonable prospects of success,” Wednesday’s apex court order reads.

The companies were also ordered to cover costs.

Nedbank’s decision to close the accounts last year came after a thorough evaluation and an internal, independent governance review, including a detailed due diligence process overseen by the bank’s board.

In December 2023, the Supreme Court of Appeal found Nedbank could terminate the accounts of companies in the Sekunjalo stable after the equality court issued an interdict barring Nedbank from closing them. Survé and Sekunjalo argued before the equality court that the bank’s decision to close the accounts amounted to unfair discrimination on racial grounds.

The applicants in the case were Survé and 43 others representing the Sekunjalo Group, while the respondents were Nedbank and Nedbank Private Wealth.

Survé told Business Day at the time that the power wielded by banks had to be challenged, and it was a constitutional matter in which banks were abusing their power by removing accounts on the basis of reputational risk.

Nedbank highlighted in its annual report earlier in the year that decisions to terminate banking relationships with clients were not “arbitrary or discriminatory”.

Sekunjalo in a statement said it would ask the Constitutional Court to reconsider its decision, implying it would launch a rescission application.

“Sekunjalo is deeply disappointed the Constitutional Court did not hear the case we presented. In a briefly worded order, the court dismissed our appeal to prevent Nedbank from closing our accounts, deeming it not worth their consideration,” Sekunjalo said.

“Sekunjalo remains confident the main cases in the equality and high courts (yet to be heard) will be successful, resulting in significant claims for damages against the banks.

“However, this is little consolation to the thousands of Sekunjalo group employees who face potential retrenchment because of the ConCourt’s decision.”

In April, Financial Sector Conduct Authority commissioner Unathi Kamlana urged banks to reflect on whether the prevailing common law position relating to closure of customers’ accounts was fair to clients.

At the Banking Association SA’s Banking on Ethics Conference, Kamlana said the absence of a bank account hampered an individual’s or a business’ ability to participate fully in the economy.

He emphasised the need for greater transparency before closing client accounts.

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