Historic FIC judgment reaffirms transparency and equality in SA’s legal framework, says top lawyer
The historic court ruling in which the Financial Intelligence Centre (FIC) was ordered to hand over information to the Sekunjalo Group reaffirmed the constitutional commitment to transparency and equality in South Africa’s legal framework, according to top lawyer Barnabas Xulu.
He represented former Department of Agriculture, Forestry and Fisheries deputy director-general Siphokazi Ndudane in the case before the Equality Court sitting in the Western Cape High Court.
Applicants in the main complaint by Sekunjalo chairman Dr Iqbal Survé submitted that they had their banking services and facilities terminated by several banking institutions and/or the banks had refused to provide banking services and facilities without any reason for doing so.
Ndudane had started her own business after resigning from her position in 2019. She registered a company and applied to open a business account at FNB, where she already operated a personal account. In May 2021, she received letters from the bank terminating both her personal and business accounts, leaving her with no means to make a living.
The applicants called the action by the banks “arbitrary and unlawful”.
Western Cape High Court Judge Daniel Thulare ordered Absa Ltd, First Rand Bank Ltd, Investec Bank Ltd, Nedbank Limited and Standard Bank of South Africa Limited to hand over their risk management and compliance programmes which drove their decisions to close the group’s bank accounts.
Further, Sekunjalo is now entitled to receive all reports of suspicious and unusual transactions made to the FIC by accounting institutions in respect of EOH Holdings and its subsidiaries, KPMG Services Proprietary Limited South Africa, Steinhoff International Holdings NV and Tongaat Hulett Development.
In an attempt to not issue the information sought, the FIC argued that the application was a “fishing expedition” and that applicants “had no legal right to the information”.
Xulu said the applicants argued that the banks had racially discriminated against them.
“The banks did not terminate banking services of white companies such as EOH Holdings and its subsidiaries (“EOH”), KPMG Services Proprietary Limited, South Africa (“KPMG”); Steinhoff International Holdings NV (“Steinhoff”); and Tongaat Hulett Development (“Tongaat”) who had been accused and found to have committed financial crimes. Some of these institutions have even admitted to such crimes, yet their banking facilities were not terminated.
“Rather than assisting the applicants as an organ of state, the FIC opposed the application on many unconvincing grounds, as the court found,” Xulu said.
“This is a historic ruling and marks the first time a court has exercised its authority to instruct the FIC to disclose information under section 40(1)(e) of Fica (Financial Intelligence Centre Act).
The judgment has set a precedent for future cases involving access to information held by the FIC, reaffirming the constitutional commitment to transparency and equality in South Africa’s legal framework.”
The judgment read: “The applicants’ Equality Court complaint included that the unilateral termination of bank accounts violated constitutional rights enshrined in the Bill of Rights of the country's Constitution.
“Without access to financial services such as bank accounts, numerous socio-economic rights in the Bill of Rights were curtailed and could not be meaningfully enjoyed or exercised such as the right to freedom of trade, occupation and profession, housing, health care, food, water and social security, education and the right to equality, and human dignity.”
Cape Times