In December, Standard Bank wrote to Bredenkamp, who holds several
accounts with it, notifying him of its decision to close his accounts.
The bank’s action followed a decision by the US Treasury Department’s
Office of Foreign Assets Control to list Breedenkamp and his associated
entities as "specially designated nationals" on November 25.
This meant Bredenkamp and his companies became subject to the sanctions imposed and enforced by the US office.
‘Standard Bank faced material business risks’
Standard Bank became aware of the listing and that the US office
suspected Bredenkamp of "being involved in illicit business activities,
including tobacco trading, arms trafficking, oil distribution and
diamond extraction, and of being a confidant and financial backer of
Mugabe".
In their papers before Judge Mahomed Jajbhay of the Johannesburg High
Court, Standard Bank argued that it was worried about its reputation.
The bank believed domestic and foreign business partners "might believe
or suspect that accounts held at Standard Bank would or could be used
to facilitate unlawful or unethical acts".
"An association with a conductor or a financier of allegedly illegal or
improper transactions might well undermine a bank’s hard-won and
fragile national and international reputation in the eyes of regulatory
bodies, financial institutions, media organisations and members of the
public worldwide," the bank argued.
"In addition to the risk of harm to its reputation, Standard Bank faced
material business risks to its relationship with foreign banks."
Bredenkamp challenged the bank’s decision in the high court, saying he
had lodged appeals against the US office’s decision to impose sanctions
on him. He also argued that if Standard Bank closed his accounts, none
of the other banks would want to have any dealings with him.
Yesterday was the date set down by Standard Bank to implement its
decision, but Judge Jajbhay granted Bredenkamp an interim order
blocking it from closing his accounts.
Bredenkamp denied allegations that he was a Mugabe crony. He said he
had been imprisoned by the "Mugabe regime" and it had taken his
Zimbabwean passport, but he had won the case.
Judge Jajbhay said the termination by of Bredenkamp’s accounts would be
"oppressive" because, in the circumstances, Bredenkamp and his
companies would be unable to find other banking facilities.
"A business entity must, to carry out its objects, have one or more
bank accounts. This is not simply because transactions through a bank
are convenient."
The Star/IOL
Post published in: News