By Lehlohonolo Lehana.
The Prudential Authority of the South African Reserve Bank (SARB) has fined Sasfin Bank R210 million for breaching SA’s foreign exchange laws.
In a SENS announcement, Sasfin informed shareholders that, on 1 August, it received notices of administrative sanctions from the Prudential Authority of the South African Reserve Bank (SARB).
The fine relates to allegations of “historic non-compliance within Sasfin Bank’s discontinued foreign exchange business,” Sasfin explains.
The company says it has and continues to work proactively and transparently with the relevant authorities and regulators.
In addition to the penalty from the Prudential Authority, Sasfin also faces a R4.87 billion civil claim from the South African Revenue Service after reports that Sasfin Bank staff, among others, were involved in laundering money in exchange for bribes from an international gold smuggling syndicate with strong ties to Zimbabwe.
Sasfin Holdings rejected the claim, saying that as soon as it became aware of the collusion, it had taken decisive action and instituted an independent investigation. This resulted in “termination of relationships with implicated clients and employees and the opening of criminal cases against them,” Sasfin CEO Michael Sassoon said in a statement at the time.
In the same SENS announcement, Sasfin also announced that it had received regulatory approval to dispose of some of its assets for R3.25 billion as part of an ongoing restructuring.
The company plans to sell its Capital Equipment Finance and Commercial Property Finance businesses to African Bank.
The company said that the conclusion of the disposal marks an essential step in its strategic reset, where it plans to delist from the JSE.
In mid-July, Sasfin made an offer to minority shareholders that valued the company at R969 million.
The company offered minority shareholders R30 a share, a 65% premium to the 30-day volume-weighted average.
The company’s two biggest shareholders – Unitas Enterprises and Wiphold – are funding the offer.
They will each subscribe for 7.5% of shares in Sasfin Wealth, whose management team is also buying into the business. Sasfin Wealth has an implied valuation of R500 million.
Meanwhile Gauteng finance and economic development MEC Lebogang Maile has requested a “rehabilitative intervention” from the governor of the Reserve Bank, Lesetja Kganyago, for The Drip Group, which is having difficulties complying with domestic tax laws.
In a letter to the Bank, Maile reaffirmed his “unwavering commitment to upholding the law” and his respect for the Bank’s investigation process regarding the company being investigated for violating exchange control regulations.
He believes the Gauteng government has an obligation to help businesses in the province in material and non-material ways.
“We cannot sit back and watch The Drip Group, a company founded in the township of Ivory Park by a young black man who had the odds stacked against him, be liquidated. The company provides employment to hundreds of people, many from historically disadvantaged groups including women and youth,” he said.