South Africa: Appeal Courts Deal Double Blow For Sekunjalo Group Of Companies

A year ago, the Eastern Cape High Court dismissed an urgent application in which Talhado Fishing Enterprises Proprietary Limited, an entity linked to the Sekunjalo Group of Companies, sought an interim interdict to prevent First National Bank ("FNB") from closing its bank accounts pending the outcome of an application to review and set aside the bank's decision to close Talhado's accounts. Following the Eastern Cape High Court's decision, Talhado applied for leave to appeal to the Supreme Court of Appeal. The Supreme Court of Appeal dismissed the application for leave to appeal on the grounds that:

• There is no reasonable prospect of success; and
• There is no other compelling reason why an appeal should be heard.

In addition, the Competition Appeal Court ("CAC") delivered its judgment on 17 July 2023 in terms of which it upheld the appeals of Standard Bank, Mercantile Bank and Access Bank. In upholding the appeals, the CAC set aside the Competition Tribunal's orders which required these banks not to close bank accounts or to reopen and maintain accounts for entities forming part of the Sekunjalo Group of Companies.

The CAC found that there was no legal, nor factual, basis to find that the banks had acted in concert when refusing to deal with Dr Surve and his entities. In respect of the Competition Tribunal's finding that there was an abuse of dominance by the banks, the CAC held that the Sekunjalo Group of Companies failed to establish that the banks were dominant and abused that dominance in respect of the Sekunjalo Group. Bearing these findings in mind, the CAC concluded that there was no prima facie case of a prohibited practice under the Competition Act. Accordingly, the Competition Tribunal should not have granted the interim relief.

The Sekunjalo Group of Companies were also ordered to pay the costs of the appellant banks together with the costs of two counsel.

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