“Racist” FNB must close EOH bank accounts – Transformation RSA

FNB must close the bank accounts of JSE-listed technology services company EOH due to its role in the procurement of overpriced contracts for the Department of Defence (DoD).

This is one of the demands of pressure group Transformation RSA, which on Thursday held a march in Sandton under the banner of #RacistBanksMustFall.

The group – which was joined by members of the ANC, NUMSA, SANCO, and EFF – claimed that FNB and Absa were racist in their conduct towards black customers, and that the banks were run by “criminals in shiny suits”.

These claims were made in light of the fact that the banks recently announced they would close the accounts held by Iqbal Survé-linked Ayo Technology Group.

The protestors claimed they were fighting for transformation of the financial sector, and were demanding that banks:

  • Stop racial profiling of blacks in the banking sector.
  • Stop racist closure of bank accounts of black organisations.
  • Stop racist exclusion of black SMMEs from acquiring financing.
  • Stop racist targeted repossession of houses.
  • Stop racist targeted repossession of cars.

The march follows the group yesterday laying a criminal charge of corruption and money laundering against FNB for providing banking services to EOH after it had admitted to overcharging R40 million for Microsoft Licences procured for the DoD.

Transformation RSA claimed FNB was giving EOH preferential treatment by continuing to provide it with banking services despite being implicated in corruption because it was white-owned company.

The group’s claims came after a recent media statement from the Special Investigating Unit (SIU) in which it provided details around its investigation into Microsoft software licences procurement contracts worth R250 million.

The SIU stated its investigation into irregularities relating to the procurement process for Microsoft Licenses uncovered overpricing of more than R40 million by EOH.

In a response, EOH clarified that it had uncovered the irregularities before the SIU and had in fact reported this to all the authorities before being approached by the SIU.

It explained its board had instructed ENSafrica to conduct a proactive comprehensive investigation into EOH Group (EOH) contracts to identify any wrongdoing or criminal conduct in the acquisition, award, or execution of those contracts.

This was done in February 2019.

EOH headline

After the ENSafrica investigation uncovered the irregularities, EOH reported it to the National Treasury, DPCI, and the FIC, before being contacted by the SIU.

Subsequent to this, it entered into an Acknowledgement of Debt (AoD) with the SIU at the end of September 2020 to pay back R41,676,493.92 for to the DoD.

“Since then, EOH has already made multiple payments in terms of the AoD, beginning in October 2020,” EOH Group Risk officer Fatima Newman said.

“To date, EOH investigations have not uncovered anything new that has not already been publicly disclosed,” she added.

Newman said EOH was not in a position to make comments about the charges against the banks, but said the company had been transparent on its findings pursuant to the forensic investigation.

“EOH has also proactively engaged with the authorities to hold the perpetrators accountable,” Newman stated.

FNB told MyBroadband it had received no correspondence relating to the charges and was therefore unable to respond at this time.

Fatima Newman, EOH’s group risk officer
Fatima Newman, EOH’s group risk officer

Transform RSA also wants FNB and Absa to desist from closing the bank accounts of Ayo, decisions it maintained were based on the fact that the company was black-owned.

NUMSA Secretary General Irvin Jim accused FNB and Absa of attempting to drive Survé out of business.

“These banks are shareholders in white ICT companies and it is in their interests to collapse a black-owned competitor like Ayo,” Jim stated.

Ayo Technology is currently facing legal action from the Public Investment Corporation (PIC), who wants it to pay back an investment of R4.3 billion in pension fund money.

The decision to invest in the company made by former PIC CEO Dan Matjila was found to be one of “gross negligence” at the PIC Commission of Inquiry.

This was because the PIC had paid R43 per Ayo share based on a misrepresented valuation of R13 billion when it was listed on the JSE in late 2017.

Financial statements showed that the company actually only had total assets of R292 million, and a net asset value of just R67 million.

An investigation by AmaBhungane has claimed that PIC money was steadily being moved to Iqbal Survé’s family holding company Sekunjalo Investment Holdings.

Sekunjalo holds indirect control over Ayo due to its majority stake in African Equity Empowerment Investments (AEEI), which is Ayo’s biggest shareholder.

Now read: EOH CEO Stephen van Coller has done a phenomenal job – it is now time to believe

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“Racist” FNB must close EOH bank accounts – Transformation RSA