Home South African FNB accused of bullying businesswoman, threatening her if she takes legal action

FNB accused of bullying businesswoman, threatening her if she takes legal action

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Lawyers for Russian-born multinational mining magnate, Lyudmyla Roytblat have expressed shock at the level of alleged bullying by First National Bank (FNB), in trying to deter her from taking legal action against the bank.

Lawyers for Russian-born multinational mining magnate, Lyudmyla Roytblat have expressed shock at the level of alleged bullying by First National Bank (FNB), in trying to deter her from taking legal action against the bank. Picture: Dylan Jacobs/African News Agency(ANA)

LAWYERS for Russian-born multinational mining magnate, Lyudmyla Roytblat have expressed shock at the level of alleged bullying by First National Bank (FNB), in trying to deter her from taking legal action against the bank.

Roytblat’s planned legal action against FNB stems from an abrupt notice to terminate her bank accounts without being any reason.

Her lawyer, Udell Hammond-Smith, is taking instruction from Roytblat, CEO of Transasia Minerals and its subsidiary Transasia Minerals SA, for the best option to deal with the termination of her accounts and those of her company. The termination was set to be effected on May 9, 2022.

Roytblat is an Australian citizen with a business visa in South Africa for mining contracts. Since opening the account in 2006, Transasia has deposited about $68,285,000 (just more than R1 billion according to current exchange rates) into its account with FNB.

Hammond-Smith on March 8 wrote a letter to FNB chief executive, Jacques Celliers, requesting reasons for serving a notice of termination on the account and demanding the withdrawal of the decision.

FNB’s head of client desirability risk management Frik Basson, however, responded by warning Roytblat about the consequences of reporting the matter to the banking ombudsman and taking legal action against the bank’s decision.

“We do place on record that should any such actions be initiated these will be vigorously opposed and, where appropriate, punitive cost orders will be sought against your clients,” read FNB’s letter to the Hammond-Smith Attorneys.

Basson also called on Roytblat to comply with the provision of the termination notice “to ensure that there is no disruption to their banking services”, which apparently suggests that if she did not comply with FNB, other banks may also follow suit.

Questions, which were specific to Basson’s intimidating reply to Hammond-Smith, were sent to FNB communication official Lwazi Stuurman.

But instead of answering those questions, the bank hid behind the “client confidentiality” clause, saying that FNB was exercising its contractual right by serving a notice to terminate the banking relationship with the client.

Hammond-Smith described Basson’s utterances as intimidation meant to deter his clients and force them to succumb.

“When the giant wants to bully you he says listen, I have powers and if you continue then you are at risk. We consider this as intimidation because for what purpose could it be for as all we are saying is that listen don’t close our accounts.”

Hammond-Smith said he raised concerns with Celliers about the inappropriate manner in which FNB had treated Roytblat who had been a business account holder in good standing for over 15 years.

Responding to Hammond-Smith’s letter, Basson stated that Roytblat’s bank services were being terminated considering, “the nature and purpose of your clients’ business activity and related matters including the manner in which your client engages with employees of the Bank, the Bank determined that it does not have the appetite for a continued relationship with your clients”.

Hammond-Smith said the bank had not categorically said what Roytblat and Transasia had done wrong to warrant the closure of their accounts.

“The bank has certain rights, there is no doubt about that, however, it is very strange that all of a sudden and out of the blue a bank wants to close the person’s account and it doesn’t want to give any reason for it.”

When asked if the termination of the accounts had anything to do with the war in Ukraine since Roytblat is of Russian origin, Hammond-Smith said: “My instructions were that that was the message conveyed to my client.”

He said it was an “extreme” coincidence that the termination coincided with many international companies cutting ties with Russia because of the war in Ukraine.

But FNB denied that the termination had anything to do with the war in Ukraine.

Hammond-Smith said his clients had instructed him to consider further steps, which might be to take the matter to the Competition Commission.

He said he would soon know what further steps could be taken, and as to whether or not the matter should also be taken to the Equality Court.

However, Basson said that Roytblat could do nothing about FNB’s action as a commercial bank’s relationship with its clients was not governed by administrative law, but by the private law of contract.

He added that even the Australian Embassy could not help as it had “no legal standing whatsoever in relation to the relationship between the Bank and your clients”.

BUSINESS REPORT ONLINE

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