FNB denies Ayo interim relief
Ayo Technology Solutions Ltd (AYO) was yesterday denied its application for urgent interim relief to prevent First National Bank (FNB) from indiscriminately terminating its transactional banking facilities. Gauteng High Court ‘s Judge Wright, ruled that FNB had sufficient contractual grounds on which to give a mere 60-days-notice to terminate its relationship with the JSE’s largest blackowned and managed ICT investment group and he, therefore, dismissed Part A of AYO’s application for an urgent hearing.
Despite being fully aware of AYO’s public image, which has been tarnished by the media through a series of factually inaccurate articles since March 2018, FNB still opened an account for AYO in October 2020.
The bank waited until mid-February 2021 to pull the plug on AYO’s account, citing reputational risk. AYO launched an urgent application on 15 April once it became apparent that the 10 or so banks it had approached had either denied them business or were still considering. With the 3rd May deadline days away, AYO proceeded to launch an application. In informing its staff of the situation, AYO’s own staff launched an application to join AYO’s matter as an intervening party.
Also joining the matter as a friend of the court, was NUMSA.
Both AYO’s employees and NUMSA’s requests were granted by the judge. Meanwhile, the refusal by FNB to grant Ayo the interim relief could mean a bleak future for 1 200 workers at the JSE-listed company.
The court deemed the application as not urgent just four days before the May 3 deadline of FNB closing AYO’s banking facilities.
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In court papers, AYO chief executive Howard Plaatjies said they sought urgent relief pending determination of final relief where they seek setting aside of the FNB decision to close their accounts, among others. Plaatjies also said the consequence of Ayo not having a transactional banking arrangement in place without any facilities being provided puts significant limitations on Ayo and would ultimately lead to the company not being able to operate.
AYO has been banking with FNB since November 2020, but the bank served the company with notice to terminate the banking relationship on March 2 this year.
Howard detailed in his court papers attempts to seek an audience from FNB to reconsider its decision but the bank refused a request for a meeting.
He said it was after they requested a copy of the contract that they decided to launch the application.
“It is necessary to state unequivocally that AYO has not been found guilty of any criminal activities, including money laundering and terrorist financing,” Howard added.
He complained that the two months notice was not reasonable and the risk of closing the accounts was not explained.
“In the circumstances, AYO’s business will certainly become unbanked for a period. All of the harm that AYO, its employees and other creditors stand to suffer will be irreversible and permanent,” he said.
“In the end, the harm caused by the FNB decision will result in the liquidation of a company which has been historically a profitable business at a time when jobs are in short supply,” he said.