Politically-connected businessman Fana Hlongwane, whose bank accounts were closed after he underwent review as a politically-exposed person in 2013, is suing Absa for R7m, claiming the closure of his accounts was unlawful and that the bank had violated his constitutional rights, says a Business Day report.

It notes Hlongwane, a key intermediary between foreign arms dealers and the government in the arms deal of 1999, came under scrutiny by the bank when he was named in documents presented to the Seriti Commission of Inquiry. The report points out his court action comes in the midst of political opposition to tighter regulation by the banks of politically exposed people as spelled out in the Financial Intelligence Centre Amendment Bill. President Jacob Zuma has declined to sign it into law.

In his application, filed last month in the Gauteng High Court (Pretoria), Hlongwane says while he acknowledges the banks’ right to close accounts where criminal activity is suspected, this must be done in good faith and in line with the Constitution and the principle of ubuntu. In closing his accounts and those of six of his companies, Hlongwane says ‘Absa acted in bad faith, unreasonably, with an improper motive and/or in abuse of his rights’. He argues Absa had no valid commercial reason for closing the accounts; that it falsely contended that it was unable to serve the needs of the companies; and that it failed to take into account that business had been conducted without any breaches of the law for nine years. Last year, a Promotion of Access to Information Act application by Hlongwane for records used in Absa’s decision was denied by Judge Nomonde Mngqibisa-Thusi, who said: ‘I am of the view that (Absa’s) bona fides in deciding to close the applicants’ accounts cannot be questioned.’

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