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MBABANE – Undisputedly, failure to stick to the letter of the law comes with lamentable consequences and a heavy price.

Nedbank Swaziland, which nearly shut down its operations in the kingdom, almost experienced this after it was allegedly busted by the Central Bank of Swaziland (CBS) for being in breach of the law.
This was in relation to the manner in which the bank handled financial transactions of Nigerian billionaire businessman Chief Benjamin Aghalieaku Arinze.

The central bank decided to institute an inquiry against Nedbank on three allegations that included failure to verify a customer’s identity and transactions, failure to monitor unusual transactions, and failure to report suspicious transactions.

On October 17, 2016, Central Bank Governor Majozi Sithole wrote to Nedbank Managing Director Fikile Nkosi, informing her of the inquiry following various correspondences and a targeted inspection conducted on July 21, 2016.
Sithole informed Nkosi that the Central Bank considered the allegations as “unsafe and unsound practices in the conduct of your business”.

The governor called upon Nkosi to show cause why the CBSshould not invoke the provisions of section 46 of the Financial Institutions Act No.6 of 2005 in relation to the allegations.
Nkosi was told that should she fail to respond within seven days, “any of the courses of action outlined in section 46 of the FIA would be taken without further engagement with yourselves”.

According to the Act, if the CBS has reasonable cause to believe that a financial institution or ally of its directors, officers, employees, controlling shareholders or connected persons has engaged in “unsafe or unsound practices”, one of the courses of action to take, as outlined in section 46, is to “revoke the licence of the institution to do banking business”.
Sithole’s letter forms part of attachments in court papers in the matter between Aghalieaku Airways, Nedbank and the Central Bank.

airways company seeking order
The airways company is seeking an order for Nedbank to unfreeze its bank account and release the money held in it.
The two banks are represented by senior lawyer Kenneth Motsa from Robinson Bertram.

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