Fishing expedition: Sekunjalo company’s bid to keep FNB bank account open fails

A company in Iqbal Surve’s Sekunjalo Group failed in an urgent court bid to prevent FNB from shutting its bank account on Wednesday.

The Gqeberha high court refused to grant an interim interdict to Talhado Fishing Enterprises, a subsidiary of Premier Fishing and Brands, saying the company had weak prospects in the long term of compelling the bank to keep its accounts open.

The Sekunjalo Group and subsidiary companies have been battling on a number of fronts to keep their bank accounts open after the damning findings of the commission of inquiry into the Public Investment Corporation (PIC), chaired by retired president of the Supreme Court of Appeal Lex Mpati.

Absa, Investec, Standard Bank and FNB have all closed their accounts. Their Nedbank accounts remain open only through an interim order of the equality court in the Western Cape High Court. However, the Eastern Cape High Court did not come to Talhado’s rescue in the same way.

FNB told Talhado it would be closing its bank accounts on February 18 because of “associated reputational and business risks” — prompting an urgent application heard in June.

The court could not insist on a banking relationship against FNB’s will, and FNB could not be forced to keep on Talhado as a client simply because other banks would not take the company on.

—  Acting judge Mechelle Beneke

The company argued in court that it needed a bank account to conduct its business and other banks were not willing to take it on as a client — leaving it “effectively unbanked”.  

Acting judge Mechelle Beneke described how Talhado had argued that this was a case where the banks wielded so much power that the “private power [of the banks] approximates public power or has a wide and public impact”.

However, while it was true that “banks wield considerable power”, the court was “constrained to apply current legal principles,” she said. 

According to the law as it stands, a bank’s decision to terminate a contract with a client was not an exercise of public power “or something equal to it”, said the judge.

The court could not insist on a banking relationship against FNB’s will, and FNB could not be forced to keep on Talhado as a client simply because other banks would not take the company on, said Beneke.

“There are no prospects of success on review. Accordingly the application for an interim interdict must fail.”

The judgment came alongside a report that the PIC, which manages the Government Employees Pension Fund (GEPF), has sold its entire stake in Premier Fishing.

BDlive reported that, according to Premier Fishing’s most recent annual report for its 2021 year, the GEPF held 19.7% of the company, but that a JSE regulatory news service announcement on Wednesday put the GEPF holding at zero.