FNB WINS AGAINST MAURITIAN BUSINESSWOMAN

MBABANE – The High Court has dismissed a Mauritian businesswoman’s application to maintain her banking relationship with FNB Eswatini, after it was terminated amid fraud and criminal suspicions.

The matter came before court under a certificate of urgency on March 20, 2024. The applicant (Choon Yoon Kiaw Kwok Choon) ran to court after she was informed that the respondent (FNB Eswatini) had closed her accounts on the basis that she was facing criminal charges preferred against her by the Crown. The businesswoman was arrested and charged for contravening the Money Laundering and Financing of Terrorism (Prevention) Act of 201l, as well the Game Act of 1953. The applicant told the court that she was a widow and businesswoman of Mauritian origin, and that she had continually lived in Eswatini for the past 39 years. She resided in Manzini. She stated that she maintained a banking relationship with the respondent (FNB Eswatini), wherein she held two banking accounts namely: Smart Gold Account No: 62775213110 and a Flexi Fixed Account No 76204267878.

Opportunity

The applicant stated that on February 29, 2024, she received a telephone call from Mbali Dlamini, who introduced herself as an employee of the bank. She said Mbali informed her that she should check her email, which had been sent to her by the bank. She stated that she found a letter signed by Mncedzi Ngomane, the Head of Retail Banking. The letter was dated February 20, 2024, but she received it on the February 29, 2024. The businesswoman submitted that the decision to terminate her banking relationship with FNB was taken unilaterally and she was never afforded the opportunity to present her side of the story. She argued that even these charges themselves have not been proven against her, hence she remained innocent until proven guilty by the court of law.

Choon stated further that there was no corelation between the charges levelled against her and the bank accounts held by the respondent. She argued that her bank accounts were never used as a conduit to commit the alleged offences and that even money involved in the offences was never withdrawn from these accounts operated by the bank. She stated that the decision-making process that was employed by the respondent in arriving at its impugned decision was seriously flawed. She said the decision was arrived at unilaterally without affording her, the right to be heard. She stated that she was never consulted or invited by the respondent to make representations on why her accounts should not be closed. The businesswoman argued that the bank acted ultra vires or misconceived the nature of its powers in terms of the enabling statute (the Financial Institutions Act), wherein the respondent only has the powers to report a suspicious transaction on her bank accounts to the Central Bank of Eswatini and not take a unilateral decision to foreclose her accounts.

She argued that there were no suspicious transactions ever transacted on her bank accounts held with the bank. She stated further that even the Money Laundering and Financing of Terrorism (Prevention) Act of 2011 does not empower the bank to close her account. She stated that it was only the Eswatini Financial Investigation Unit (EFIU) that applied penal measures against a party who has been proved to have contravened the Financial Institutions Act.

Obligations

In its opposition, the bank argued that the matter in question related mainly to rights, duties and obligations of the parties based on the written agreement. Ngomane, the FNB Head of Retail Banking, stated further that in respect of the respondent, it related to further compliance with national and international obligations, policies, local legislation, guidelines, notices and directives, among other issues. Ngomane stated further that the cancellation of the contract in question related to an exercise of contractual rights, as opposed to same being an administrative decision or a tribunal’s decision or a decision taken in exercise of the judicial or quasi-judicial powers and, therefore, such decision is not reviewable. Ngomane stated that the bank as a financial institution was a corporate citizen and its banking operations were guided by legislation together with guidelines, notices and directives.

He further state the bank has a duty to protect its business and reputational risk that may result from any actual or perceived unlawful acts, crimes, illicit conducts or transactions, money laundering, breach of national laws by its account holders. Ngomane stated that among the rights and duties contained in the contract between the parties was that the bank has a right to terminate the contractual agreement on 30 days’ notice in terms of Clause 9, which states that the bank can terminate the contract between the parties based on any information relating to or any suspicions of any fraud or criminal activity or conduct, actual or perceived.

Clauses

To reach the judgment, the court stated that it has taken time to reproduce contents of Clause 9, which relates to Sanctions and Financial Crime to appraise the reader of the contractual terms and obligations of the parties in this matter. The court stated that the contract contained specific clauses about when a contract would be terminated, so it was clear that the respondent had grounds for termination and in this matter the bank has clearly articulated the reason being the Game and Money Laundering and Financing of Terrorism criminal charges, which the applicant was facing and that these criminal charges posed reputational and business risk to the aforesaid bank. It was the court’s view as formulated from the merits in this case that the review proceedings had no merit, because the relationship between the parties was strictly contractual flowing. The court dismissed Choon’s application with costs.

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