By Edmond Phiri
The recent report that the National Prosecuting Authority (NPA) has charged McKinsey South Africa with fraud, corruption and theft is set to draw the focus on the banks that have recently been notorious for closing the bank accounts of black companies and businessmen.
How the banks treat the matter of McKinsey in the coming days or months would be telling. The McKinsey case puts a stern test on the banks’ conduct and integrity.
The banking sector has been accused of bias, and selective and racist conduct against black versus white companies.
The Equality Court interdict had concluded in June in the case of Dr Iqbal Survé’s group of companies versus Nedbank, delved into that matter. Dr Survé is a black industrialist, philanthropist and a media-house owner.
The Sekunjalo group had turned to the Equality Court for an interdict after Nedbank issued it with a notice to terminate its banking facilities, claiming it had suffered reputational damage in banking accounts associated with the group, and allied companies within the group.
The judgment was in Sekunjalo’s favour, and Nedbank was stopped from closing the accounts. Judge Mokgoatji Dolamo found that Sekunjalo had a prima facie case of discrimination and that Nedbank had treated it differently from white companies.
Nedbank’s submission on the case laid bare the hypocrisy and lies used by some of the banks to target blacks racially. Nedbank could not present plausible reasons to the court why it closed Sekunjalo group’s bank accounts, but kept white-owned firms accused of corruption open.
The argument of “reputational risk” was exposed as a thin veneer of giving credibility to their racist actions against black-owned companies with no wrongdoing or having a case against them.
Public reports about allegations of corruption by white-owned companies such as Steinhoff, EOH, and Tongaat Hulett are damning. But Nedbank kept their bank accounts operational.
In court, Nedbank claimed that these companies had “rehabilitated”, after changing management and issuing media statements – something that any company in that position would do.
Many South Africans would wait to see how the banks respond to McKinsey’s indictment. Will the McKinsey case confirm the continued existence of systemic racism that transformed itself into corridors of white corporate monopolies such as the banks?
Will the banks’ treatment of McKinsey expose how white and white-owned companies continue to enjoy “white privilege” at the hands of the economic power systems?
A recent State Capture report on Eskom, Transnet, and the state-owned enterprises (SOEs) exposed them as “corruption dens for white companies, banks and audit firms”.
Nedbank featured prominently, especially around its links with the Gupta-linked Regiments Capital and many questionable Transnet and SOE dealings. Ironically, Nedbank was closing down Sekunjalo’s bank accounts due to so-called “reputational risk”.
Despite receiving a dishonourable mention in the state capture report, the white companies have never been seen as a “reputational risk” by the banks. Neither did they have their banking facilities shut down.
Sekunjalo and its associated companies have no corruption or pending corruption matters before law enforcement agencies and state institutions. Despite years of a barrage of propaganda against the company, not one “witness” could go to the Zondo Commission of Inquiry into State Capture to accuse the company of any wrongdoing. It is clear that Dr Survé ran a clean ship and continues to do so.
Sekunjalo’s sin is being a black-owned industrialist company and playing in the major sectors of the economy preserved for whites. The more one looks at the different treatment of white companies versus black companies, it becomes evident that the closure of Sekunjalo’s accounts is racist and targeted.
If the claim of “reputational risk” used by the banks to arbitrarily close the bank accounts of blacks were true, the banks themselves and their executives would not have the banking facility. No government institution, including SOEs would have a bank account.
In 2017, banks were caught out in large-scale corruption of rand manipulation and “fixing”. The daily average of worldwide turnover in trading in the rand then was around $49 billion (R160bn at $1 to R12 at the time).
Many banks paid admission of guilt fines to the Competition Commission for the transgressions. Former Absa chief executive, Maria Ramos, apologised – and the following day, life moved on.
After the NPA charge, will McKinsey’s life move on, as it does for many white companies caught in corruption scandals? Will the treatment of McKinsey further confirm the racism deeply entrenched in the economic power system that has never transformed since 1994?
How banks treated Sekunjalo against corrupt white companies is deeply hurting. It is even more saddening that 30 years into democracy black companies should be begging the courts for equal treatment in their own country – while the McKinseys enjoy a free racist ride.