By Sipho Tshabalala
In the deeply corrupt underbelly of South Africa's financial and corporate landscape, a disturbing pattern of privilege and protection emerges. Major corporations, implicated in corruption scandals that have cost investors, pensioners, and the nation hundreds of billions, continue to operate with impunity. Among these offenders are Nedbank, EOH, Tongaat Hulett, and Steinhoff—names that have become synonymous with fraud, embezzlement, and corporate malfeasance. Yet, despite the damning evidence and admissions of guilt, these companies and their executives still enjoy full banking privileges.
At the centre of this egregious double standard is the continued open-door policy banks maintain for these corruption-riddled companies, while black-owned businesses like Sekunjalo are shut out, their accounts closed under nebulous claims of “reputational risk.” The hypocrisy of South Africa’s financial sector is laid bare, as white-owned firms are shielded from scrutiny, even as their crimes dwarf those committed by their black counterparts.
Nedbank stands at the heart of this hypocrisy. Despite being implicated in the State Capture Commission's findings, the bank has faced no significant consequences. On July 26, 2024, the Special Investigating Unit (SIU) launched proceedings against Nedbank over interest rate swap transactions with Transnet, transactions that netted the bank over R2.7 billion. These deals, linked to the notorious Gupta family, were part of a scheme to misappropriate public funds—yet, Nedbank remains unscathed, its accounts untouched, and its executives free to continue their operations.
The interest rate swaps, as highlighted in the State Capture report, were void and unenforceable under the Public Finance Management Act, violating both constitutional and public policy. Yet, Nedbank has not faced the same punitive actions meted out to black-owned businesses like Sekunjalo, whose accounts were shuttered without due process or substantive evidence of wrongdoing.
EOH, a name synonymous with bribery, tender fraud, and kickbacks, has been implicated in numerous corruption scandals involving state contracts, including those with the South African National Defence Force and the Department of Water and Sanitation. The company overcharged for services and delivered fewer licences than billed, defrauding the state while lining its own pockets. Investigations uncovered over R1.2 billion in suspect payments, with R700 million attributed to services that were never rendered.
Despite these serious violations, EOH’s accounts remain open, and its executives continue to operate within South Africa’s financial ecosystem without consequence. Former executives like Jehan Mackay, who funnelled questionable loans to government officials, have only recently faced arrest—yet, the company itself continues to thrive. The Zondo Commission exposed EOH’s deep involvement in state capture, but the banking sector has remained silent, refusing to take meaningful action against the company.
Steinhoff International’s financial fraud scandal is the largest corporate scandal in South African history, costing investors over R220 billion in market value. The company’s executives, led by former CEO Markus Jooste, orchestrated a complex scheme of fraudulent intercompany loans and manipulated financial statements to present a false picture of the company’s financial health. This deception continued for years, unnoticed by regulators and auditors.
Despite the gravity of Steinhoff’s crimes, the company still enjoys full access to banking services. Jooste, the mastermind behind the fraud, was fined a mere R475 million for publishing misleading financial statements—a paltry sum compared to the billions lost. His recent suicide in 2024 only deepens the mystery surrounding the case, but it does little to bring justice to the investors and pensioners whose lives were destroyed by his actions.
Tongaat Hulett, another major player in South Africa’s corporate corruption saga, was brought to its knees by a massive fraud scandal involving the backdating of land sale agreements and the manipulation of financial statements. The company’s executives, including former CEO Peter Staude and CFO Murray Munro, were charged with fraud amounting to R3.5 billion, yet Tongaat’s bank accounts remain open.
The company’s financial misreporting led to a significant loss of value for shareholders, including government pensioners, but no meaningful action has been taken by the banking sector. Auditing firm Deloitte, which failed to detect the fraudulent activities, settled with Tongaat for a mere R260 million—a slap on the wrist for one of South Africa’s largest financial scandals.
The treatment of Sekunjalo stands in stark contrast to the leniency shown to companies like Nedbank, EOH, Steinhoff, and Tongaat Hulett, all of which have been implicated in major corruption scandals but continue to operate freely within South Africa's financial system. Despite their significant legal and financial transgressions—ranging from fraud to embezzlement—these companies have not faced the same banking restrictions as Sekunjalo, a black-owned conglomerate accused of no criminal wrongdoing. This disparity highlights the racial biases that plague both the banking and legal systems, where justice seems to be reserved for white-owned enterprises, while black businesses are marginalised. It is a chilling reminder that South Africa's promise of impartiality and fairness remains elusive, entrenched by a legal system that fails to hold all parties to the same standard.
While white-owned firms like Nedbank, EOH, Steinhoff, and Tongaat Hulett continue to enjoy unfettered access to banking services despite their egregious crimes, black-owned businesses like Sekunjalo are cast out, their accounts closed under the flimsiest of pretences. This double standard is a glaring example of the systemic racism that still pervades South Africa’s financial sector.
The question remains: why are white-owned businesses, involved in far greater corruption scandals, shielded from scrutiny, while black-owned businesses are punished? This stark disparity in treatment highlights the deeply entrenched racial biases that continue to plague South Africa’s banking sector, perpetuating the injustices of the past and preventing true economic equality from being realised.
The selective enforcement of banking regulations in South Africa is a grave injustice that cannot be ignored. The crimes of Nedbank, EOH, Steinhoff, and Tongaat Hulett are well-documented, yet these companies continue to operate with impunity, their executives untouched by the law. Until South Africa’s financial sector is held accountable for its complicity in this hypocrisy, true justice will remain out of reach.
* Sipho Tshabalala is an independent writer, commentator and political analyst.
** The views expressed do not necessarily reflect the views of Independent Media or IOL.