Bank’s decision may lead to job losses, says AYO’s CEO
AYO Technologies chief executive Howard Plaatjies said the aftermath of First National Bank’s (FNB) decision to shut down the company’s accounts meant that several people could lose their jobs in the middle of a pandemic
He described the bank’s closure of the company’s transactional accounts as aggressive action.
In an announcement on Thursday, AYO Technologies informed its shareholders that the company had been given notice by FNB of the closure of its transactional accounts and that it had launched legal proceedings against the bank.
“Despite the company’s best efforts, FNB has not provided AYO with what it regards as valid reasons for termination. The company believes that it is entitled to fair treatment and, as a result, the company has instituted legal proceedings against FNB for its decision to close the company’s transactional banking facility,” read the statement.
AYO has said in court papers that FNB’s decision would lead to more than 1 200 job losses.
Plaatjies said the way forward for them was to head to the courts. However, he said he couldn’t disclose too much information regarding the court procedures.
“All I can say is, we are not heroes but we can’t sit back in this situation. This court action is necessary to protect our business and the livelihoods of thousands of people. We’ve done nothing wrong. We’re just a black business trying to survive the onslaught of unwarranted media attention and we really want to change that narrative by presenting the facts before the court.
“We believe our constitutional rights have been violated and this is a matter of public interest. FNB provided us with no reasons to terminate this banking relationship with AYO and this despite numerous attempts on our part to get reasons. They’re causing irreparable harm to our business,” said Plaatjies.
“Banks know that these businesses don’t have deep pockets to spend on litigation and they take advantage of it. With respect to AYO, if we don’t have bankers, it means the death of our business. We all know that the ICT sector needs transformation a lot. There are very few ICT companies of AYO’s stature,” said Plaatjies.
The company’s removal from the JSE will have a “devastating impact” on employees and their dependants, he said.
He added that the removal of a significant competitor from the market place would be a setback for transformation. “It will allow old monopolies to go uncontested and our country just can’t afford it.”
The Black Business Chamber (BBC) slammed FNB’s decision to close AYO’s banking accounts without providing reasons to the company.
“The BBC is disappointed and angry at the actions of FNB to close AYO’s banking account. This is even more disturbing when, according to the statement from AYO, FNB provided no reasons for the closure of its accounts,” the organisation said.
Nadiah Maharaj, FNB’s chief risk officer, said: “FNB can confirm it has given reasonable notice to terminate its banking services to the client concerned. Due to the confidential nature of our client relationships, we cannot provide any further details on the matter.”
Several unions, business organisations and political parties hit back at FNB’s decision.
Cosatu spokesperson Sizwe Pamla said they disagreed with the arrangement of banks where they have unchecked powers, while Communication Workers Union (CWU) general-secretary Aubrey Tshabalala called for FNB to reverse its decision against workers, which it said was tantamount to economic treason.