With Standard Bank's deadline to close Independent Media bank accounts just a week away, recent comments by EFF MP Ndlozi have come under the spotlight as he sounded the alarm about the urgent need for a state-owned bank.
This as the Competition Commission’s Economy Concentration Tracker report revealed the sector was still dominated by “the big four”.
Standard Bank last month indicated its intention to close banking accounts of Sekunjalo-related companies including Independent Media.
This has sparked renewed calls for a state-owned bank, with unions citing Standard Bank’s move as an attack on media freedom and the livelihoods of ordinary employees.
Standard Bank and other banks had approached the Competition Appeal Court to appeal the Competition Tribunal finding which found that there was a prima facie case that the banks had engaged in market dominance and anti-competitive behaviour.
The banks cited reputational risk as among the reasons for its intended closure of these banks accounts.
While the Tribunal found that having received and perused all the documents before it, there was no evidence of any wrongdoing by any of the Sekunjalo Group of Companies, following a favourable judgement by the CAC, Standard Bank noted its intention to proceed with closing the company’s accounts.
The CAC found that the Tribunal had erred because Sekunjalo had not, it said, provided the Tribunal with evidence of collusion to close its group accounts.
The termination could affect more than 30 companies and the livelihoods of over 1000 employees under Sekunjalo, including Independent Media.
After Sekunjalo lodged a bid for leave to appeal to the Constitutional Court, challenging the Competition Appeal Court (CAC), which had ruled in favour of Standard Bank, the bank announced that it would continue to provide banking services in the interim.
According to the Concentration Tracker, although there are 17 registered banks, the sector is largely dominated by four large banks - Standard Bank, Nedbank, ABSA and FNB.
The largest four banks combined, constituted 89.9% in 2016 and 87.6% in 2019 in terms of assets under management.
Based on research into concentration among commercial banks in other countries, South Africa’s concentration ratio exceeded that of Brazil, Russia and Nigeria between 2016 and 2019, the Competition Commission had found.
In light of this, Ndlozi at the Black Business Council conference said: “If you have to forget everything that I said, we need a bank. Let’s just all of us in 2024 gather at the voting stations and vote for anyone who's going to start a bank, the day after elections, that is going to support black people on anything. That is going to give money to schools because we already have the money but we are not organising it in the financial sector in order to reinvest in our opportunities.”
He said a state-owned bank focused on black people would be the “genesis of transformation”.
“Organised capital that we must organise through a bank and invest in ourselves. The ANC is very scared, they have no willingness to take the land, they have no willingness, I don’t know who they are scared of because everything that they did, did not work.
You can tweak the policies, it’s not even the policies most of the time, it’s the bravery, the willingness to start institutions that the entire white community is going to be scared of because they won’t be special anymore. We must start a state bank and we must make sure it’s run properly and we punish harshly people who steal public funds,” Ndlozi said.
Meanwhile Standard Bank maintained it still sought to close the accounts.
“Following the favourable judgment in the CAC, which found no evidence that Standard Bank breached the Competition Act, the interdict which prohibited Standard Bank from terminating the Sekunjalo accounts was set aside. The Sekunjalo Group subsequently filed an application for leave to appeal to the Constitutional Court. Standard Bank has opposed the application for leave to appeal and the parties have yet to receive an indication of whether the Constitutional Court will hear or dismiss the application on the papers.
“Standard Bank notified Sekunjalo of its intention to give effect to the termination of the applicable accounts, after 16 September 2023, the date upon which the Competition Tribunal order was set to expire. The Sekunjalo Group has since filed an application to extend that date, which various banks, including Standard Bank, are opposing.
“Standard Bank strongly refutes the claims that Standard Bank does not support media freedom. Standard Bank fully supports and has always upheld the freedom of the press and the important role that media plays in society.”
Cape Times