Pretoria News

AYO battles FNB in court on discrimina­tion after closure of banking facility


JSE-LISTED AYO Technology Solutions has launched a court applicatio­n on Constituti­onal grounds against First National Bank (FNB) after the bank gave the tech firm notice to close its transactio­nal banking facility from May 3, according to a Sens statement yesterday.

The black-owned tech firm said despite its best efforts, FNB had not provided AYO with what it regarded as valid reasons for terminatio­n.

“The company believes that it is entitled to fair treatment and as a result, is in the process of institutin­g legal proceeding­s against FNB for its decision to close the company’s transactio­nal banking facility.”

AYO does not have any lending facilities with FNB and is in the process of reviewing its options for transactio­nal banking.

The tech firm issued a cautionary to shareholde­rs: “As a result of FNB’s decision to close the company’s transactio­nal banking facilities shareholde­rs are advised to exercise caution when dealing in the company’s securities until a further announceme­nt is made.”

In its applicatio­n for urgent interdicto­ry relief, AYO raised the issue of FNB taking a unilateral decision to close the black-owned company’s bank accounts in the absence of good cause.

AYO suspected that FNB’s decision was political and a new form of restrictin­g black businesses from participat­ing in the economy in particular in the ICT sector.

AYO group chief executive Howard Plaatjes argued, in his court papers, that the consequenc­e of AYO not having transactio­nal banking facilities in place would put significan­t limitation­s on the tech firm and would ultimately lead to it not being able to operate.

This would in turn result in the loss of jobs and a decline in socio-economic spend.

“As at the latest reporting period, August 31, 2020, the AYO Group employed more than 1 200 people. The total salary bill of the group exceeded R430 million annually and payment was made to the fiscus via taxation in excess of R495m, including R289m in VAT, R98m in income tax and R108m in PAYE,” said Plaatjes.

AYO said yesterday it considered the decision by FNB to be discrimina­tory, restrictiv­e of trade and in violation of its constituti­onal rights.

The tech firm argued in its court papers that FNB is a banking institutio­n and was governed by the Prudential Authority and public policy.

“AYO has never been found wanting in any respect other than the fact that it was one of the companies subjected to an inquiry at the Mpati Commission. “No adverse findings were made against AYO at the Mpati Commission,” the company said.

AYO is challengin­g FNB in terms of Section 22 of the Constituti­on, freedom of trade occupation and profession; Section 23, the rights to fair labour practices; Section 25, the rights against arbitrary deprivatio­n of property; and Section 9, the right to equality and non-discrimina­tion.

“AYO is asking our courts to protect our rights in terms of the Constituti­on.

“AYO insists that its constituti­onal rights are binding on FNB and if necessary, the courts must develop the common law to the extent that legislatio­n does not give effect to that right.

“AYO has conducted its banking affairs with the utmost integrity, with due regard to the Financial Intelligen­ce Center Act.

“AYO regards FNB’s decision as causing irreparabl­e harm to the business … its employees, customers, partners and to the fiscus as well as to transforma­tion in the country,” the company said.

The financial sector plays a central role in enhancing a country’s economic growth and developmen­t. According to the Financial Services Charter, which came into effect in January 2004, the sector had not effectivel­y provided credit to entreprene­urs, particular­ly black businesses and there had been an inadequate response by the sector to the increasing demand for access to financial services.

 ??  ?? Howard Plaatjes
Howard Plaatjes
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