By Edmond Phiri
The recent Quarterly Bulletin report by the South African Reserve Bank (SARB) revealing that foreign investors sold off South African equities at the fastest pace in over a year demands urgent attention. Certain conduct is exacerbating investor uncertainty, and the actions of ENS (Edward Nathan Sonnenbergs) law firm’s Aslam Moosagee appear to be a significant contributor to the deteriorating investment climate in the country.
The SARB report highlights the importance of revisiting a statement released by the Information Communication Technology Union (ICTU) just a few months ago. ICTU condemned what it described as the "unethical conduct" of Moosagee, the Banking Association of South Africa (BASA), and South African banks. The allegations put forward by ICTU are deeply concerning. General Secretary Vulture Ntuluki stated that Moosagee, a senior attorney at ENS, played a key role in orchestrating the closure of bank accounts belonging to Sekunjalo, one of South Africa’s black-owned companies, by leveraging his influence within BASA.
According to Ntuluki, while representing BASA, Moosagee facilitated coordinated efforts among multiple banks to cripple Sekunjalo’s operations. “We have it on good authority that Moosagee has been at the centre of this coordinated attack,” Ntuluki stated. “It’s time to hold him, BASA, and the banks accountable for these unethical and unlawful actions.” What is particularly revealing is that neither Moosagee, ENS, nor BASA have issued a public response refuting ICTU’s claims.
The ICTU expose of Moosagee and BASA colluding with the banks exposes a broader conspiracy and the rogue level the financial services sector has stooped to. SARB’s report, which noted that "portfolio inflows fell 26% to R33.4 billion ($1.8 billion) in the quarter, compared with the previous three months," highlights the fragile state of investor confidence. SARB attributed this decline to a broader shift in sentiment towards emerging markets and weak domestic economic growth.
Investor sentiment is highly sensitive. How can confidence in South Africa’s financial sector be maintained when it operates in a manner reminiscent of a mafia syndicate? How can investors trust a market where influential lawyers in major law firms act as "fixers," orchestrating the closure of bank accounts for targeted companies? While foreign investors may not be directly involved in these domestic disputes, they take note of such developments. The unethical behaviour of banks and those who manipulate them for personal gain sends a chilling message to foreign investors.
In a previous piece, I highlighted the manner in which banks operate with tactics akin to Sicilian mafia organisations. ICTU’s statement further exposes the extent to which Moosagee allegedly "coordinated the banks" to ensure Sekunjalo’s financial exclusion. Beyond their unethical behaviour, banks also face serious conflicts of interest. Many hold shares in companies that compete with their own clients. When competition becomes too intense, some resort to closing bank accounts as a means of eliminating rivals, as seen in the Sekunjalo case. How can foreign investors feel secure in such an unpredictable environment, where access to banking services can be arbitrarily revoked without due process?
A November Competition Commission finding that banks acted collusively in closing Sekunjalo’s accounts further reinforces ICTU’s claims about Moosagee’s role in this scheme. The justification banks provided for their actions—"reputational damage"—was nothing more than a convenient excuse, weaponised by individuals like Moosagee. The pressing question remains: why would a lawyer be so determined to destroy a black-owned company by pushing relentlessly for the closure of its accounts?
ENS, Moosagee’s firm, has a history of controversy and allegations of unethical conduct. In 2021, Mendiswe Mzamane accused the firm of agreeing to represent her company, accepting her money and confidential information, only to later withdraw from the case due to its conflict of interest as a panel member for the Small Enterprise Finance Agency (Sefa), which was a respondent in the matter. The following year, former ANC Treasurer General Mathews Phosa accused ENS of fraud, corruption, and collusion, even going as far as lodging a complaint with the Legal Practice Council.
With the United States now implementing legislation to eliminate the misuse of "reputational damage" as a justification for financial exclusion, it is imperative that South Africa follows suit. Without such reforms, rogue elements within the legal and financial sectors will continue to exploit the system for their own personal vendettas. The financial services sector is one of the most critical pillars of the economy, playing a key role in sustaining investor confidence. The allegations outlined by ICTU paint a deeply troubling picture of collusion and deliberate economic sabotage. The actions of Moosagee and BASA are more than just unethical—they are a direct threat to South Africa’s economic stability.
* Edmond Phiri is an independent writer, analyst and commentator.
** The views expressed do not necessarily reflect the views of IOL or Independent Media.