Update: Another bank abandons Iqbal Survé

FNB has followed Absa’s cue and cut ties with Survé. It is entirely possible other banks will follow suit – or have already done so.

Media mogul Iqbal Survé’s business empire received another body blow after a second bank refused to do business with Ayo Technology Solutions, the most controversial of the companies indirectly controlled by his Sekunjalo Investment Holdings.

FNB will cease its banking services to Ayo on 3 May, the company announced  on the JSE’s SENS news service yesterday.

News of FNB’s decision to dump Ayo follows amaBhungane’s revelation two weeks ago that Absa had cut ties with all companies directly or indirectly controlled by Sekunjalo. This included three companies listed on the JSE: Ayo, African Equity Empowerment Investments and Premier Fishing & Brands.

Survé now faces the very real possibility of the kind of bank boycott that helped destroy the Gupta family’s South African operations.

Although the Absa decision was made in August last year, none of the Sekunjalo companies made any announcement to the market about this potentially ruinous development. But following our article on Absa, Ayo made the FNB move public. Ayo has launched an interdict application to halt FNB’s decision, the company said in its SENS announcement.

This seems unlikely to help. Last year, Premier Fishing quietly abandoned a court application to interdict Absa’s closure of its accounts four days after the bank filed responding papers.

Other banks that have provided accounts to Ayo – at least up to September last year – include Nedbank, Investec, Bank of China, Standard Bank and Albaraka. Among these only Bank of China held very significant Ayo deposits.

Judging by the most recent financial statements of Ayo, African Equity and Premier Fishing, only Ayo utilized FNB to any meaningful extent.

It is possible that the wider Sekunjalo group might already have lost other banking facilities or may lose them in the near future. Sekunjalo itself is a private company and has no reason to announce who it banks with. It did not bank with Absa, as can be gleaned from Absa’s court papers last year.

The last time financial statements were available for Survé’s crown jewel, Independent Media, the newspaper publishing group banked with Standard Bank.

 

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