In a crucial finding that has gone largely unreported, the Competition Commission, on November 19, found that Nedbank and several other banks were guilty of colluding to push the Sekunjalo Group out of the banking market through prohibited practices.
This finding not only highlights the unethical strategies employed by these major banking institutions but also underscores the necessity of protecting competitors like Sekunjalo who are committed to fair market practices.
Correspondence from the Competition Commission reads: “The investigation found that the banks took a decision to terminate and/or refuse to open bank accounts for the Sekunjalo Group of companies. Sekunjalo will be forced to exit markets where they are active as a direct result of the banks’ decision to terminate and/or refuse to open bank accounts for them.
“The investigation also found that the decision by the banks to terminate and/or refuse to open bank accounts for Sekunjalo constitutes a prohibited concerted practice by firms in a horizontal relationship, which has the effect of lessening competition in markets where Sekunjalo is active in contravention of section 4(1)(a) of the Act. The investigation further found that the exit of Sekunjalo Group in the market will have substantially negative effects on public interest.
“The Commission has requested the banks to provide written submissions on efficiency and other pro-competitive arguments that could justify their decision to terminate and/or refuse to open bank accounts for Sekunjalo. The banks have not yet made submissions.”
As a result, Sekunjalo petitioned the Competition Tribunal to interdict Nedbank to force it to reopen those accounts.
The matter has now been referred to the Competition Tribunal for prosecution, potentially leading to fines of up to 10% of Nedbank’s annual turnover.
One of the most telling facets of this case is Nedbank’s defence. The bank argues that Sekunjalo and its affiliated companies maintain alternative bank accounts, suggesting that the closure of their accounts by Nedbank would not significantly impact Sekunjalo’s operations.
Notably, Nedbank has stopped short of claiming that Sekunjalo has engaged in any wrongdoing. Nedbank admitted in 2021, in correspondence to Sekunjalo, that the conglomerate never did anything wrong.
This argument reveals an attempt by Nedbank to justify its actions while conveniently ignoring the core issue: closing accounts to eliminate a black-owned conglomerate that they deem to be “undesirable” is not a legitimate business practice.
While Nedbank insists that Sekunjalo’s other banking partnerships mitigate the damage caused by its actions, this viewpoint fails to account for the larger implications of collusion in the banking sector.
The essence of fair competition lies in providing all businesses—regardless of their size—an equitable opportunity to compete and thrive in the marketplace. By conspiring to close Sekunjalo’s accounts, Nedbank has resorted to tactics that undermine competition, hinder consumer choice, and threaten the ecosystem of diverse financial services that are essential to a healthy economy.
Moreover, the alleged involvement of ENS attorney Aslam Moosajee—a lawyer representing multiple banks, including Nedbank, and linked to the Banking Association of SA (Basa)—raises serious ethical questions. With suspicions of conflicts of interest looming over Moosajee, his connection to banks facing investigation invites scrutiny into whether banking professionals are truly acting in the interest of justice and competition or merely safeguarding vested interests.
The Information Communication Technology Union (ICTU) called on the Competition Commission and the tribunal to investigate the role of Moosajee and Basa, stating: “There is a lawyer at a law firm called ENS who acts for the Banking Association of South Africa, called Basa. It’s at Basa that this lawyer coordinates the attacks on Sekunjalo by all the banks.
“This lawyer, from what we’ve heard from our members, has a personal vendetta against the Sekunjalo chairman, Dr Iqbal Survé, and he acts for ENS, for several white entities that are determined to see Sekunjalo out of the market.
“We have other confidential information, but our members who have these sources in Basa don’t want to make it public as they are afraid they may lose their jobs in the banks. As a union, we understand that Mr Aslam Moosajee, who is the ENS lawyer, and the Basa lawyer also act for Nedbank and for several other banks. This is the coordination that is taking place by the banks, coordinated mainly by him.”
The Competition Commission’s decisive finding stands as a pivotal moment for the Sekunjalo group. It signals that the injustices faced by this group are not simply overlooked and paves the way for potential restoration.
As the case transitions to the Competition Tribunal, the focus must remain on holding Nedbank accountable for its actions and reaffirming the principles of fair competition that are foundational to our market.
This ruling is a reminder that the financial landscape must be one where ethical practices prevail and where all players, particularly those like Sekunjalo, can operate without fear of intimidation or exclusion.
The Competition Tribunal now has the opportunity to enforce the findings of the Commission and ensure that those who engage in anti-competitive behaviour face the consequences of their actions.
As stakeholders and consumers reflect on this development, it becomes clear that the future of fair banking practices hangs in the balance. The legitimacy of our financial system depends on the commitment to ethical conduct, and the competition must be preserved for the sake of innovation, consumer choice, and economic health.
In the fight against collusion and the defence of Sekunjalo, may justice be served loud and clear.