AYO Technology Solutions, the company indirectly controlled by Iqbal Survé, has filed an urgent High Court application to stop FNB from terminating its transaction banking facilities, it said yesterday evening.

Earlier, notes a Business Day report, the company had informed shareholders in a statement issued after the market closed that the bank intended to sever ties with the company with effect from 3 May.

AYO said it had instituted legal proceedings against FNB as the bank had not provided it with ‘valid reasons’ for the move.

‘FNB provided no reasons for its decision terminate its banking relationship with AYO, notwithstanding AYO's requests for it to do so. This has left AYO with no choice but to apply for an urgent interdict against FNB. AYO believes that FNB's decision is both unlawful and unconstitutional,’ the company said.

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AYO said it was notified about the pending closure without any ‘valid’ explanation and therefore it had decided to take up the legal fight, notes a Fin24 report.

‘Despite the company's best efforts, FNB has not provided AYO with what it regards as valid reasons for termination. The company believes that it is entitled to fair treatment, and as a result, the company has instituted legal proceedings against FNB for its decision to close the company's transactional banking facility,’ read the announcement.

AYO said it does not have any credit accounts with FNB and was in the process of looking for other options for its transactional banking needs.

Fin24 notes FNB is the second of SA's big commercial banks to close accounts linked to Survé's businesses.

Last month, amaBhungane reported that Absa had severed all ties with companies directly or indirectly controlled by Sekunjalo Investment Holdings eight months ago.

Absa closed all banking facilities linked to Survé's African Equity Empowerment Investments, its AYO, and Premier Fishing & Brands.

Only Independent Media appeared unaffected.

Full Fin24 report

AYO suspects that FNB’s decision is political and a new form of restricting black businesses from participating in the economy, in particular, in the ICT sector, claims a report in the Cape Argus, a newspaper in the Independent Media group.

AYO group chief executive Howard Plaatjes argued, in his court papers, that the consequence of AYO not having transactional banking facilities in place would put significant limitations on the tech firm and would ultimately lead to it not being able to operate.

This would, in turn, result in the loss of jobs and a decline in socio-economic spend.

‘As at the latest reporting period, 31 August 2020, the AYO Group employed more than 1 200 people. The total salary bill of the group exceeded R430m annually, and payment was made to the fiscus via taxation in excess of R495m, including R289m in VAT, R98m in income tax and R108m in PAYE,’ said Plaatjes.

AYO said yesterday that it considered the decision by FNB to be discriminatory, restrictive of trade and in violation of its constitutional rights. The tech firm argues in its court papers that FNB is a banking institution and is governed by the Prudential Authority and public policy.

‘AYO has never been found wanting in any respect other than the fact that it was one of the companies subjected to an inquiry at the Mpati Commission. No adverse findings were made against AYO at the Mpati Commission,’ the company said.

AYO is challenging FNB in terms of Section 22 of the Constitution, freedom of trade, occupation and profession; Section 23, the rights to fair labour practices; Section 25, the rights against arbitrary deprivation of property; and Section 9, the right to equality and non-discrimination.

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