The 140-year-old Standard Bank building at 13 Adderley Street in the heart of Cape Town served as Standard Bank's headquarters for 68 years. Picture: Armand Hough / African News Agency (ANA)
In what could potentially be a devastating blow to media freedom in South Africa, Standard Bank South Africa (SBSA) has issued letters to Independent Media and 30 other companies in the Sekunjalo Group, informing them of the closure of their business bank accounts on 21 August.
The Cape Argus, Cape Times, Star, Daily News, IOL and several major news outlets around the country are Independent Media brands, and staff’s salaries are paid via Standard Bank accounts.
The move by SBSA, which has been viewed as yet another example of international banks’ egregious abuse of power, is a direct threat to the job security of an estimated 1600 media workers employed by Sekunjalo, which is owned by Iqbal Surve.
The letters, signed by Herbert Smith Freehills South Africa Attorneys Inc, were issued on July 21 and gave Sekunjalo a 30-day notice period before closure of the accounts.
SBSA’s communication followed a Competition Appeal Court of SA ruling that upheld the decision taken by three banks to stop offering their services to Sekunjalo companies.
The appeals court ruled last week that the Competition Tribunal had erred in ordering SBSA, Mercantile Bank and Access Bank to either reopen or not close Sekunjalo's accounts.
The banks had appealed the tribunal’s ruling in September 2022 that there was evidence that they had engaged in anti-competitive behaviour when deciding to stop doing business with Sekunjalo.
Standard Bank’s decision to terminate the accounts was based on fear of reputational damage, following unfavourable media reports on the findings of the Mpati Commission of Inquiry's Report into the Public Investment Corporation (PIC).
The PIC had claimed that a R4.3 billion investment it made in AYO Technology Solutions Limited, a tech company in the Sekunjalo stable, was unlawful.
However, in March this year, Sekunjalo was vindicated when AYO and the PIC agreed to a settlement in the Western Cape High Court - putting paid to the “reputational damage” argument.
Surve believes this proves the banks’ motives are political and alluded to a “nexus” between the five major banks’ shareholders and “those who fund politicians”.
“It is clear to us that Standard Bank is acting on political instruction. The banks have an interest in our [media] competitors. The demise of Independent Media would benefit Standard Bank,” he said.
“This leads to a situation where part of the media landscape and diversity are under threat. It is a direct attack on media freedom. This is a problem for our democracy and our constitution.
“It’s ironic because Standard Bank is a sponsor of the Sikuvile Journalism Awards.”
Surve added that the closure of Sekunjalo's media companies’ bank accounts would put 1600 workers and their 7000 dependants’ livelihoods at risk.
In a statement to Independent Media, Standard Bank welcomed the Competition Appeal Court’s ruling.
“Last year, the Competition Tribunal found that, in refusing to deal with the Sekunjalo entities, Standard Bank, amongst other banks, had acted in co-ordination with one another, and acted unilaterally as dominant firms, to abuse a dominant position in terms of the Competition Act.
“Standard Bank is pleased with the judgment which confirms Standard Bank’s position since inception, that we have not been involved in any anti-competitive behaviour as alleged.
“Following the favourable judgment, Standard Bank is engaging with the Sekunjalo Group on the next steps.”
Independent Media Editor in Chief Aziz Hartley slammed Standard Bank’s “apartheid” tactics.
“Standard Bank's decision is ill-considered and reminiscent of the kragdadigheid we witnessed during the height of apartheid.
“The decision to close the banking accounts could potentially destroy Independent Media and shut down media freedom in the country. It amounts to an abuse of power at a time ordinary South Africans experienced hardships akin to what the previous regime had unleashed on them.
“Apartheid had shut down the media space and in doing so, curtailed people's right to know. For something similar to be happening during democracy is shocking to say the least and one can but wonder why the bank’s board members would allow something like this to happen on their watch,” he said.
Cape Argus