ANC reaches out to banks to keep Bosasa accounts open

The ANC wants banks terminating their contracts with facilities management company Bosasa to reconsider and keep their accounts open so that the company can pay employees.

The ANC’s acting spokesperson, Dakota Legoete, told eNCA that the party was concerned for workers, as a result of the banks closing Bosasa’s bank accounts at the end of the February.

“What we can do is to try to lobby them to allow accounts of this company to operate so that they can pay their liabilities in particular salaries of their staff members because those members have worked and deserved to be paid.

“Our concern is that whoever is a director or board member of that company must assist to ensure that workers do not go to sleep without food on the table.”

Around 4,500 employees may lose their jobs after Bosasa, trading as African Global Operations, applied for liquidation.

The banks have reportedly cited reputational risk as their reason for cutting ties. Bosasa, in a statement, said the banks’ decision to “distance” themselves from the group led them to the decision of voluntary liquidation. They say their treatment by the banks was “occasioned by negative media reports” which caused them “extensive reputational damage”.

The statement further states that their decision to liquidate had nothing to do with the group’s liquidity status, financial stability, operational performance, or growth forecasts as the group was both factually and commercially solvent.

Statements from First National Bank and Absa confirmed they had informed Bosasa that their bank accounts would be closed on or by February 28.

While Absa and FNB refused to comment on their reasons for cancelling business with the group, citing client confidentiality, they could be protecting themselves from the consequences of breaching the Financial Intelligence Centre Act (Fica), according to Banking Association of South Africa managing director Cas Coovadia.

Fica is intended to combat money laundering and the financing of terrorism and related activities.

According to the Prevention Act, which falls under Fica, any person who knows that property is or forms part of the proceeds of unlawful activities but enters into any agreement or transaction with that property, legally or not, is guilty of an offence.

“Banks are highly regulated because they have to have confidentiality and trust. If the confidentiality and trust fall, then the banking system falls,” Coovadia said.

“If [banks] do business with corrupt companies and there are issues of money laundering, they fall afoul of the law. Fica is clear about that.”

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