JOHANNESBURG – The Finance Union Sasbo has come out in support of banks’ decision to terminate their relationships with Oakbay Investments and the Guptas.
The union represents around 70 000 employees in the banking and finance sector.
“South African Banks are highly regulated and apart from the Banks expecting to know their clients, they are also governed by various types of legislation including the Financial Intelligence Centre Act (Fica),” the union’s general secretary Joe Kokela said in a statement.
“Banks are subject to the supervision of the SA Reserve Bank and as service providers they can be held accountable by the National Consumer Commission in respect of any complaint. There rests an onus on all financial institutions to report any suspicious activities committed by an account holder and to investigate these activities,” Kokela said.
FNB and Absa are some of the financial institutions that have severed ties with Oakbay and its related companies. Due to client confidentiality, no reasons were provided for the decision at the time.
Kokela said any transgression increases the onus on the financial institution “exponentially” to the extent that the institution could be held responsible and be exposed to liability.
“The key factor is that banking is a voluntary and private relationship between the Bank and its clients, therefore the Banks have a right to terminate any relationship should a possible contravention be foreseen.”
Kokela said since most local banks depend on the foreign market to fund their treasury and other countries also have strict regulatory requirements, no South African Bank can afford to transgress international regulation that could affect their banking license or sustainability.
“Sasbo is comfortable that the Banks made the right decision without being influenced.”
Kokela said the issue around the Oakbay Investment employees being unable to receive their salaries is not factual since Oakbay has banking accounts with an international bank operating in South Africa.
“As a result of the Banks’ actions, Sasbo as a trade union is therefore not concerned about the employment security of the Oakbay employees,” Kokela said.
In April, Oakbay expressed its disappointment with a decision by Independent Media not to run Oakbay adverts in its newspapers. The adverts were addressed to the CEOs of Absa, Nedbank, Standard Bank and FNB and urged them to “restore banking services” to the company.
“The livelihood of Oakbay’s 7 500 employees and dependents are in your hands,” the ad read.
Oakbay Investments have said that it would not be able to pay its workers from June 7 if it cannot restore banking relations, Reuters reported earlier.
Moneyweb approached Oakbay for comment. It will be added as soon as it is received.