Case Law[2025] ZAGPPHC 351South Africa
Ibex Investment Holdings Limited and Others v South African Reserve Bank and Others (2024/085397) [2025] ZAGPPHC 351 (23 April 2025)
Headnotes
of the planned payments. It is common cause the SARB had at the time that approval was sought been provided with extensive detail of the planned payments. Ibex on the same day provided such summary. On 28 June 2024 Standard Bank informed Ibex it could not proceed with any payments as the SARB had
Judgment
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# South Africa: North Gauteng High Court, Pretoria
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## Ibex Investment Holdings Limited and Others v South African Reserve Bank and Others (2024/085397) [2025] ZAGPPHC 351 (23 April 2025)
Ibex Investment Holdings Limited and Others v South African Reserve Bank and Others (2024/085397) [2025] ZAGPPHC 351 (23 April 2025)
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sino date 23 April 2025
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
Case
Number: 2024-085397
(1) REPORTABLE: NO
(2)
OF INTEREST TO THE JUDGES: YES
(3)
REVISED.
DATE
:
2025-04-23
SIGNATURE:
In
the matter between:
IBEX
INVESTMENT HOLDINGS LIMITED
First
Applicant
SIHPL
PROPRIETARY LIMITED
Second
Applicant
SAHPL
PROPRIETARY LIMITED
Third
Applicant
IBEX
RSA HOLDCO LIMITED
Fourth
Applicant
AINSLEY
HOLDINGS PROPRIETARY LIMITED
Fifth
Applicant
and
THE
SOUTH AFRICAN RESERVE BANK
First
Respondent
LESETJA
KGANYAGO N.O.
Second
Respondent
NOMFUNDO
TSHAZIBANA N.O.
Third
Respondent
TSUMBEDZO
CHARLES NEVHUTANDA N.O.
Fourth
Respondent
DION
NANNOOLAL N.O.
Fifth
Respondent
THE
MINISTER OF FINANCE
Sixth
Respondent
FIRSTRAND
BANK LIMITED
Seventh
Respondent
THE
STANDARD BANK OF SOUTH AFRICA LIMITED
Eighth
Respondent
This
judgment was prepared and authored by the Judge whose name is
reflected and is handed down electronically by circulation to
the
Parties/their legal representatives by email and by uploading it to
the electronic file of this matter on CaseLines. The date
for handing
down is deemed to be 23 April 2025.
JUDGMENT
POTTERILL
J
[1]
The applicants, to whom I for ease of reference will collectively
refer to as Ibex
Investment Holdings [Ibex], the successor company of
Steinhoff International Holdings N.V. [Steinhoff] has for 7 years
through
restructuring and settlements attempted to minimise the
extreme harm caused by Steinhoff that was exposed in December 2017.
The
first to fifth respondents to whom I collectively will refer to
as the South African Reserve Bank [SARB] approved, where necessary,
the externalisation of funds for purposes of restructuring or paying
stakeholders outside of South Africa. The seventh respondent,
FirstRand Bank Limited [FirstRand] and the eight respondent, The
Standard Bank of South Africa Limited [Standard Bank] are authorised
dealers to deal in foreign exchange and Ibex is required to deal with
the SARB through these dealers pertaining to the exchange
control
applications. No relief is sought against them and they did not
participate in the proceedings. The sixth respondent, the
Minister of
Finance, did not participate in the proceedings.
[2]
Ibex sought permission for foreign exchange payments from the SARB
referred to as
the 0443 application [0443]. The purpose of the 0443
was summarised as "Permission to expatriate funds received in
future
by the Ibex group in respect of South Africa assets to settle
foreign commitments as previously authorised." The purpose of
0443 was to implement Ibex's obligation to implement a restructuring
plan. The transactions contemplated in the WHOA Restructuring
Plan
[the Netherlands settlement] were submitted to the Reserve Bank as
part of obtaining approval for the delisting of SIHNV form
the JSE in
2023. In order to implement the WHOA Ibex needed to expropriate
funds. The detail of how this would be achieved was
depicted as a
flow diagram using the face value of the various loans, the
relationship between the Topco, RSA Holdco, Ibex Investments,
SIHPL,
SAHPL, Newco 2A, the Newco2A Loan, the RSA Holdco Loan, the Ibex
Investments Loan, the S133 Settlement loan, the Titan Receivable
and
the South African Assets and the flow of the funds were set out in
0443. The SARB approved Payments 1-5 as the 0433 in April
2024.
[3]
The primary asset of Ibex is its shareholding in Pepkor Holdings
Limited [Pepkor].
Ibex would realise from the sales of this
shareholding funds and these funds would be transferred within the
Ibex Group to SIHPL
and Ibex Investments to pay its financial
creditors in the 0443.
[4]
On 11 April 2024 the SARB authorised the payments as requested as
follows:
- Payment 1:
EUR 212,486,869 under loan reference number 1[...] for the Newco2A
loan note
- Payment 2:
EUR 122 million under loan reference 1[...]2 under the RSA Holdco
loan note
- Payment 3:
EUR 473,778,870[ amount could vary] under loan reference number
1[...]3 payment of the section 155
settlement note;
- Payment
4: EUR
1
,632,287,754 as a dividend payment to RSA Holdco Limited, but this
amount could vary dependant on the Pepkor share price, operating
expenses and the Rand/Euro exchange rate;
- Payment 5: "With
regard to the request to settle the remaining obligations of SIHPL
Proprietary Limited (SIHPL), including
for example the S155
Settlement Note without further reference to the South African
Reserve Bank (SARB)(except for reporting on
a quarterly basis), we
note that this amount is included in payment 3 above of EUR473 778
870 with the Titan Receivable, valued
at 2024-01-31 determined at EUR
65 900 362 of the EUR 65 900 362 of the EUR 473 778 870. Kindly
note that such remaining obligations
are to be placed on record with
the Financial Surveillance Department and that prior written approval
be obtained as and when SIHPL
intends to implement settlement of
same.
Furthermore, it should be
noted that the payments now approved above may not be made by
utilising any of the blocked funds,
Finally, we require to be
updated on the processes and external payments as and when same are
being implemented, during the entire
period."
[5]
After the SARB gave 0443 approval for payment to be made in terms of
0433 Ibex realised
funds by selling 500 million Pepkor shares in a
process followed on 24 and 25 June 2024, raising ZAR 9 billion. Ibex
had approached
investment banks to on behalf of Ibex ensure the
shares are sold in a commercial window to realise the best price. The
investment
banks did this through an accredited book build. The SARB
was informed of this sale. Ibex consequently requested FirstRand and
Standard Bank to make the payments in terms of the approved 0443.
[6]
On 26 June 2024 FirstRand informed Ibex that it may not make any
payments under 0433
without further permission from the SARB. It was
also conveyed that the SARB sought a summary of the planned payments.
It is common
cause the SARB had at the time that approval was sought
been provided with extensive detail of the planned payments. Ibex on
the
same day provided such summary. On 28 June 2024 Standard Bank
informed Ibex it could not proceed with any payments as the SARB had
queried typographical errors in the 0433. These typographical errors
had been corrected on 23 April 2024 via FirstRand. There was
incorrectly referred to "sections 83B(ii) and (vi) of the
Authorised Dealers Manual" instead of 83(B)(ii) and l.3(B)(vi)
of the Authorised Dealers Manual.
[7]
On 2 July 2024, the day that the majority of the payments were to be
made to the expectant
offshore recipients FirstRand informed Ibex
that the SARB had instructed it not to make payments and sought
information detailing
the sources of the funds to be externalised,
financial statements, as well as information on the identities of the
purchasers of
the Pepkor shares. This information had to be supplied
on the same day, 3 July before close of business. Ibex complied and
provided
the information to FirstRand on 3 and 4 July 2024.
[8]
Ibex on 8 and 16 July 2024 by means of letters set out the prejudice
it was suffering
by being hindered to make the payments in terms of
the approved 0443 and that the actions of SARB would force Ibex to
approach
a court for relief. The SARB's attorneys answered that Ibex
had not sufficiently informed the SARB of the implementation of the
0443 Approvals; the sale of the Pepkor shares needed specific
approval and the funds that were being expatriated were in nature
capital that required specific approval from the SARB. It is common
cause that not one of these reasons are now submitted as reasons
for
the prohibition of the withdrawal of funds in SARB's answering
affidavit to this application.
[9]
On 25 July 2024 the attorneys for the SARB attached blocking orders
issued by the
SARB as a "response" to Ibex's
communications. Three sets of blocking orders over funds in Ibex's
accounts were issued
in terms of Regulation 22A(1) and/or 22C(2):
- R53,105,570.19 in
respect of Ainsley;
- R572,554,084.02 in
respect of SAHPL;
- R3,075,213,477.00 in
respect of Ibex in respect of Ibex Investment; RS,497,686,532 in
respect of SIHPL.
[10]
Ibex then launched this application on an urgent basis in a nutshell
seeking a review, a declaration
of invalidity and setting aside of
the decisions of the SARB under Regulation 22 A(1) and/or 22C(2) of
the Exchange Control Regulations
[Regulations] of the prohibition of
the withdrawal of funds in the accounts standing to the credit of
Ibex for the payments as
approved in 0443. Furthermore, that the
blocking orders be lifted. The other relief sought will be addressed
later on in the judgment.
This application will be referenced as the
"main application."
[11]
Pursuant to a meeting held between the legal representatives of the
parties a settlement agreement
was reached that was made an order of
court on 19 September 2024. The settlement agreement provided that
the payments in terms
of Payments 1 and 2 of 0443 be settled in full.
In terms of payment 3 of 0443 a substantial portion could be
implemented but not
in its entirety. In terms of payment 4 of 0443
ZAR 3,075,200.000 could be paid but not the balance of EUR 1,63
billion.
[12]
The settlement agreement provided that the blocking orders issued to
Ainsley, Ibex Investment
and SIHPL be uplifted. The settlement
agreement also provided that certain funds held by SAHPL in the
blocked account be released,
but that an amount of R200 million plus
accrued interest would remain blocked in the SAHPL account. In clause
13 it is recorded
that "The Reserve Bank shall not issue any
further attachment or blocking orders in terms of Regulation 22A or
Regulation
22C of the Regulations in respect of the funds released
from the Blocking Orders in terms of this Agreement and which shall
be
used for purposes of making payments in accordance with this
Agreement."
[13]
Only during counsel's argument on behalf of the SARB was the
concession made that payment 3 could
be settled as worded in 04333,
i.e. the amount is subject to variability and that the anomaly
between the wording in 04333 and
the settlement can be settled as the
wording as set out in 04333. There is accordingly no further dispute
pertaining to payment
3 of 0443.
[14]
The SARB filed a counterclaim to the main application. In a
self-review it is seeking this Court
to review, declare invalid and
set aside the permission(s) granted on 11 April 2024 by Mr Johan
Kruger [Kruger], a functionary
of the Financial Surveillance
Department [FinSurv] of the SARB pursuant to the submission by
FirstRand Bank of 0433. Alternatively,
reviewing, declaring invalid
and setting aside of the permission granted in respect of Payment 4
in the 0433 approval. The basis
for this relief is that Kruger did
not have the authority to grant permission for 0433. The counterclaim
is to be read as the defence
to the main application.
Lack
of authority
[15]
I find it prudent to first address the issue of the lack of authority
of Kruger. This is simply
so because this is also the sole defence
raised to the issue of payment 4 in the main application. I also
entertain it as the alternative
to prayer 1 as set out in prayer 2 of
the counterclaim because payments 1-3 of 0433 are moot.
[16]
I start of by setting out the relevant Regulations. The Regulations
[GNR.1111 of 1 December 1961]
made under the Currency and Exchanges
Act,1933 sets out the default position that no foreign exchange
transaction may be entered
into except with the permission of
Treasury. In terms of Regulation 22 E(1) of the Regulations the
Minister of Finance may delegate
any power or function conferred upon
the Treasury under the Regulations to any person. In terms of a
delegation dated 29 March
2023 the Minister of Finance delegated as
follows:
"2. All powers
and functions conferred, and duties imposed on the Treasury by
Regulations 22A(1)(c),22A(2),22A(3),22B,22C(1),22C(3)
and 220 to-
2.1
the Head of the Financial Surveillance Department of the South
African Reserve Bank;
2.2
a Divisional Head of the Financial Surveillance Department of the
Bank; or
2.3
any official of the Bank who in terms of the internal rules or
authorisations, or both of
the Financial Surveillance Department of
the Bank is an authorised signatory of the Financial Surveillance
Department of the Bank
... "
[17]
The SARB has internal rules contained in a document titled "Limits
for signing officials
for the period 2024-04-01 to 2025-03-21".
It is marked confidential and it is thus common cause that that it is
an internal
governance document not published externally containing
internal signing limits. The heading of this document contains the
following:
"NB! -
Associate/Analyst staff should note that having an application with a
transaction value in excess of R10 billion (as
explained in this
document) you would be required to draft a submission to the DG and
where the transaction value exceeds R15 billion
a submission to the
GEC must be drafted, both documents must be submitted to your signing
official/manager."
[The
DG is the Deputy Governor and the GEC is the Governor's Executive
Committee.]
[18]
The signing limits also references respective job levels. Alongside
the job levels are different
processes for different categories of
signing officials; "FC3", "M2" or "M3"
and "M1'. The SARB
avers that Kruger has a M1 designation. The
process set out for an M1 official is as follows:
"1.
Transaction value not to exceed R10 billion at time of application.
2.
In excess of R10 billion review submission to DG.
3
In excess of R15 billion review submission to GEC and give/send to
Divisional
head."
The
evidence of the SARB in the counter-application and reply.
[19]
It is set out in the affidavit of Mr Nevhutanda, the Acting Head of
FinSurv, that he "noticed
during the course of the current
litigation, that certain amendments had been made by Kruger to the
0433 pertaining to payments
1-3. These "amendments were not
communicated to the management of FinSurv by the designated
functionary." When he investigated
this it "became apparent
that Kruger did not have the authority to grant permission, as one
composite approval, in respect
of Payments 1 to 4, in terms of the
applicable signing limits referred to above." And "According
to the signing limits
the designated official did not have the
authority to approve an application the value of which exceeded ZAR
10 billion, and in
instances where an application and/or the
transaction value exceeds ZAR 10 billion a submission needs to be
submitted to the responsible
DG for approval. Applications and/or
transaction values which exceed ZAR 15 billion need to be submitted
to the Governor's Executive
Committee (GEC) for approval."
[20]
Payment 4 on its own also "exceeded the designated official's
signing limit in terms of
the applicable signing limits." The
approval of Payment 4 required the designated official to refer it to
the GEC, but he
did not.
[21]
This is the only evidence set out in the founding affidavit bar the
content of 0443, the content
of the settlement agreement and the
relevant legal framework.
SARB's
reply
[22]
It was submitted that Kruger's decision stands, even if the senior
management was aware or became
aware 0443 was granted by Kruger,
until set aside by a court. It could not be expected of Kruger to
file an affidavit as he is
suspended pending an investigation by an
independent third party relating to this matter.
[23]
The GEC did not approve the transactions contained in the 0443 and
therefore no valid permission
existed in terms of the SARB's internal
protocol. There need not be evidence put up by the SARB pertaining to
the flow of applications
to FinSurv because the issue is the approval
by the GEC. There was no subsequent endorsement or ratification of
0433 and therefore
there can be no trail of evidence. The lack of
authority is an inference that needs to be drawn by the Court and the
evidence therefore
lies in the documents before the Court.
[24]
The person who signed the 0443 approval is identified by a person's
signature. Attached to the
reply is then attached 0433 with a
signature, not the same document as attached to the founding
affidavit. The other approved applications
were granted at GEC level
and communicated to Ibex also as "obo Division Head", as on
the 0443, but that is "no
more than co-incidental."
[25]
It is denied that Kruger only had to escalate 0433 to the OH, it was
required to be escalated
to the executives of the SARB. It is
submitted that the Excon Delegation delegates powers and functions,
inter alia
, to the Head, a OH or authorised signatories in
acting on the strength of the Excon Delegation. "However, in
this regard the
Head of Department, the Divisional Head and Mr Kruger
had no authority to approve the 0443 Application, and it would have
to be
referred to the required duly authorised level for approval and
the grant of permission." The GEC is only a committee that
advises and makes recommendations to the Governor or a Deputy
Governor who then makes a decision.
[26]
It was denied that it would not be just and equitable to set aside
the decision as Ibex could
just approach the SARB for the approvals
again. There is no prejudice to Ibex. The review was brought as soon
as possible and a
Court would be slow to let an unlawful
administrative action stand due to some measure of delay.
Ibex's
answer to the counter-application
[27]
In the answering affidavit it is set out that the SARB, as an organ
of state seeking to review
its own exercise of public power, has
failed to set out sufficient and full disclosure to establish that
Kruger had no authority.
[28]
The full extent of the facts set out by the SARB is that it received
0443 in February 2024 and
the approval was granted in April 2024. Not
a single fact is set out as to who received or considered it. The
SARB did not tell
the Court who sought clarification and no
supporting evidence of such clarification request is attached. The
SARB did not set out
the conduct of Kruger to enable a determination
of what he did. The averment that Kruger granted the approval is not
supported
by a single document, least of all by Kruger himself. The
identity of the OH is not identified and no evidence is forthcoming
from
the OH on whose behalf 0433 was issued. The deponent to the
answering affidavit, Mr Nevhutanda [Nevhutanda], the acting Head of
Department of Finsurv, does not say that that he was unaware of 0443.
There are no affidavits from Kruger, the unidentified OH
and any of
the members of the GEC to confirm that they had no knowledge of 0443.
There are no supporting affidavits from the 1
st
, 2
nd
,
3
rd
or 5
th
respondents to support the version
of Nevhutanda.
[29]
In the letter of 11 July 2024 from FirstRand setting out the reasons
why payment in terms of
0443 was prohibited there is no indication
that the relevant senior officials were unaware of the approved 0443.
This was five
months after the application was sent in for approval
and three months after it was approved. It was argued that it was
improbable
that senior management did not know or approved 0443 and
that Kruger, as a senior official, was on a frolic of his own.
[30]
It was submitted that the self-review must be evaluated against the
SARB's refusal to deliver
a record for its self-review despite
requests, an undertaking and its obligations to do so. The SARB had
in fact in the settlement
agreement agreed to file a record if it was
to bring a self-review.
[31]
On 25 October 2024 the SARB delivered documents with the heading
"Record." It included
the settlement agreement and the
Court Order recording the settlement. As well as the 0443 application
with the SARB reply to the
0443 application. The delegation in terms
of the Exchange Control Regulations and the FinSurv limits for
signing officials for
the relevant period and a letter dated 4 March
2024 from Ibex to the SARB. When Ibex sought a full and proper record
from the SARB
on 4 November 2024 SARB through its attorneys submitted
that the self-review is brought in terms of a legality review, not
PAJA
and therefore Rule 53 is not applicable and the documents
attached to the founding affidavit constitute the record.
[32]
On 13 November 2024 the SARB then changed its stance submitting that
it was not obliged to file
a record and the documents provided as the
"Record" were in fact just annexures to the founding
affidavit. In the replying
affidavit the SARB again flip flopped
averring that the documents under the "Record" do
constitute the "record
that befits the self-review," but do
not "address the merits of the 0443 Application and the facts
that were considered
by Mr Kruger in granting the 0433 Approvals
without the required authority."
[33]
It was argued that the documents that the SARB had not provided are
the documents that are in
law required to be produced. Ibex submitted
that the decision to issue the 0443 approvals was valid and the
record of that decision
must be provided. In LNG Scientific (Pty) Ltd
v Special Investigating Unit and Another 2024 JDR 2618 (GP) at para
[53] the Full
Court found that:
"There can be no
doubt that a respondent is entitled to the record in self-review
applications. A refusal of the record impinges
on the procedural
rights of the respondent. The fact that a state organ initiates a
legality review of its own decision, cannot
limit a respondent's
right to a record. It is of no comfort to be advised that the Rule 53
discovery is the applicable procedure
for access to documents in
self-review applications."
The
Constitutional Court has found that: "The current position in
our law is that - with the exception of privileged information
- the
record contains all the information relevant to the impugned decision
or proceedings. Information is relevant if it throws
light on the
decision-making process.
[1]
[34]
The argument went that there must be documents that served before the
person or persons granting
the 0443. In the founding affidavit no
document was provided that Kruger granted the approval. All of a
sudden in reply a copy
of the 0433 approvals is attached onto which
an electronically scanned unidentified signature has been affixed. No
explanation
is provided as to why this was not attached to the
founding affidavit, why it differs from the 0443 attached to the
founding affidavit
and the approval that Ibex received. There is not
a single document supporting the contention that the approval was
granted without
authority by Kruger or the DH. There are no internal
emails, no minutes of meetings or any document attached that Kruger
granted
the 0433 and in a rogue manner. There is no explanation
provided as to why senior management, when aware of the 0433
approval,
allowed it to be taken without authority and why the lack
of authority was only discovered during this litigation. There is
simply
silence as to who then raised the queries on 0433 and how
those concerns could have been raised if the 0443 where unauthorised
at source. Nevhutanda's sayso is not confirmed by anybody with
direct knowledge, because it is important to remember that he
denies
that; "I as Acting Head of the Department and the executive
management of the SARB knew about, approved of, or had
been involved
in the, granting of the 0433 Approvals."
[35]
In the replying affidavit Nevhutanda makes a new allegation that in
fact the senior officials
at FinSurv did know by whom the 0433
approvals were given. It was argued if they knew that Kruger gave the
approval then it showed
a complete absence of subterfuge on the part
of Kruger. Yet in the replying affidavit is also now averred that
Kruger knew he did
not have the authority to grant the approvals.
Moreover that Kruger could not make an affidavit where he has "been
suspended
pending an investigation by an independent third party into
this matter." It was argued this can only mean that Kruger
disputes
Nevhutanda's version of events and it is not stated that
Kruger refused to make an affidavit.
[36]
Also contradictory is Nevhutanda stating that: "It is denied
that I as Acting Head of the
Department and the executive management
knew about, approved of, or had been involved in, granting of the
0443 approvals."
How is it possible to know that Kruger granted
the 0433, but did not know of the 0433 approval? If they did not
know, it was surely
to have been raised when in June/July 2024 0433
was sought to be implemented.
[37]
It was also submitted that the gaps in the evidence must be evaluated
against the extensive engagements
between the SARB and Ibex over the
last seven years. This includes the high profile investigation into
Steinhoff, with blocking
orders and forfeitures being granted. Kruger
was a senior official who attending many meetings between SARB and
Ibex and he was
well aware of the heightened scrutiny of SARB's
approach to Ibex. It was improbable that the 0443 with vast amounts
would have
been approved by someone lacking authority. It cannot be
ignored that the SARB first tried to block the implementation of 0433
for completely other reasons and only when the urgent application was
launched did the lack of authority arise.
[38]
On behalf of Ibex it was argued that the SARB had not made out a case
that the 0433 was granted
by a person lacking authority. The Court
must decide whether the 0443 approval was granted
ultra vires
.
A DH had the authority, without referencing any other procedure, to
grant an approval of a transaction of any value. It was submitted
that upon a reading of the delegation with the signing limits
document a manager with an M1 designation has the power to grant
approval over R15 billion. The only requirement is that it must sent
to either the DG or the GEC and DH dependant on the amount.
This
interpretation must be correct because, it is conceded that the GEC
is not granted any power to approve. The SARB confirmed
that the
signing limits document does not prevent Kruger from "purporting
to grant the 0433 Approval." The GEC only gives
their blessing
to Kruger's approval. The signing limits does not grant any power it
simply caters for an internal process.
[39]
Ex facie
the 0443 it is granted "o.b.o the Divisional
Head." The 0443 was addressed to the DH by Ibex and the
authorised dealer.
The queries and answers thereto were addressed to
and answered by the DH. Yet, the DH, who is unidentified, has
provided no evidence.
Nevhutanda in reply avers that he and the
executive management of the SARB did not know of the 0433, but did
not say the DH did
not know. There is no evidence as to whether
Nevhutanda was the acting DH at that time or who the DH was when 0433
was granted.
Nowhere is the allegation made that the submission in
terms of the signing limits document was not sent to the DH. The only
inference
is that the DH was aware of 0433.
[40]
Reliance was also placed on the presumption that acts that occur
regularly or routinely are presumed
to have followed a regular
routine or course [
omnia praesumuntur rite esse acta
]. It was
submitted the SARB did not with this in mind prove the unlawfulness
of the 0433.
Decision
on lack of authority
[41]
The SARB, an organ of state, is bringing an illegality review based
thereon that the official
that granted the 0443 did not have the
authority to do so. The SARB thus has the onus to prove that 0443 was
granted unlawfully,
is invalid and must be reviewed and set aside. It
has this duty in the counter-application as well as in the main
application simply
because the approval stands until set aside.
[2]
There can accordingly be no duty on Ibex to prove that the approval
was lawful. I only mention where the onus lies in response
to
argument from counsel for the SARB, who argued that Ibex has the
onus. However, in motion court proceedings the question of
onus does
not arise and the approach in
Plascon-Evans
[3]
is applicable
irrespective where the legal or evidential onus lies.
[4]
It may be that the SARB as the respondent in the main application
and, as the applicant in the counter-application, attracts different
approaches in term of the
Plascon-Evans
principle, but that is
questionable as the defence to the main application is only set out
in the counter-application where the
SARB is the applicant.
[42]
To be successful in the self-review the SARB must set out a full
account of the facts before
the Court. In
Public Protector v South
African Reserve Bank
2019 (6) SA 253
(CC) in para [152] the Court
expressed this requirement as follows:
"The Constitution
requires public officials to be accountable and observe heightened
standards in litigation. They must not
mislead or obfuscate. They
must do right and they must do it properly. They are required to be
candid and place a full and fair
account of the facts before a
court."
[43]
I make little of the SARB's argument that although 0443 is termed an
"approval" it
is in fact a permission and the Court must
draw a distinction between the two; it is seeking the setting aside
of the permission
and not the approval. Permission was sought and
0443 was approved and nothing turns thereon; if the permission is set
aside the
approval is set aside and the permission falls away.
[44]
The SARB in its self-review is seeking to review its own decision and
is called upon to in its
founding affidavit set out fully and
satisfactorily why its own written and communicated 0443 approval was
invalid. In SARB's founding
affidavit the only facts relating to a
lack of authority is summarised as follow:
- The SARB received
ECA0443;
- The four payment
applications' details are set out [I do not find it necessary to
repeat it as it has been set out];
- FinSurv requested
further clarifying information that Ibex furnished in a letter dated
4 March 2024. The information related to
payments 3 and 4 and the
details thereof are set out;
- The details of the
approved 0443 is set out;
- During the course of
this litigation Nevhutanda, as acting HO, discovered that certain
amendments to 0443 were made by Kruger
in relation to payments 1 to 3
which were not communicated to the management of FinSurv by the
designated functionary. Upon investigating
this incident it became
apparent that Kruger did not have the authority to grant permission.
Kruger holds the position of a M1[manager]
in FinSurv.
- He did not have
authority to approve as one composite approval, Payments 1- 4 in
terms of the applicable signing limits. Kruger
did not have the
authority to approve an application that exceeded ZAR 10 billion. In
such instances a submission needs to be submitted
to the responsible
DG for approval. Applications that exceed R15 billion needed to be
submitted to the GEC "for approval."
[5]
- Payment 4 on its own
also "exceeded the designated official's signing limit in terms
of the applicable signing limits."
The approval of Payment 4
required the designated official to refer it to the GEC, but he did
not.
[45]
Since I need not deal with 0433 as a composite application [payments
1-3 being moot], the only
grounds for setting aside payment 4 is thus
that the designated official exceeded the signing limits in terms of
the signing limits
document and payment 4 required the designated
official to refer it to the GEC which he did not do.
[46]
There are no confirmatory affidavits from the first, second, third,
or fifth respondents. There
is no affidavit from the DH at the time
of approval of 0433. There is no affidavit from any member of the GEC
at the time.
[47]
The documents filed as a "record" is of no help to this
Court. It consists of the 0443
application, the approval of 0443, the
delegation in terms of the Exchange Control Regulations and the
FinSurv limits for signing
officials for the relevant period. Also
included is a letter dated 4 March 2024 from Ibex to the SARB. From
these documents I cannot
determine whether Kruger granted the
application. There is no document from the DH or the GEC stating that
it did not receive any
referral from the designated official.
[48]
This Court is left in the dark as to how this process of approval
flows. I don't know to whom
this application was allocated when
received. In the words of the Constitutional Court
[6]
"no light is thrown on the decision-making process" and I
don't know if it was Kruger who raised the queries on 0443.
SARB is
completely silent on who the unidentified DH is. It is not anywhere
averred if the approval of payment 4 landed on Kruger's
desk what his
next step should have been. This is not a legal interpretation, it is
a factual enquiry based on Mr Nevhutanda's
assertion it should have
been sent to the GEC for approval. Yet, it is common cause that the
GEC cannot approve it because the
GEC is only a committee that
advises and gives recommendations to the Governor or OG. This is
confirmed by Mr Nevhutanda's replying
affidavit with Nevhutanda
contradicting himself by therein conceding that the escalation to the
GEC is only for consideration,
not approval.
[49]
The argument on behalf of the SARB that because there was no approval
there will be no evidence
to put before this Court, is rejected. It
would have been a simple exercise to obtain affidavits from the DH
and a member of the
GEC to confirm that in terms of the signing
limits documents Kruger had not referred it to the DH or the GEC;
Kruger was on a frolic
of his own. I also find it difficult to accept
that there is no-email, minute, written enquiry, a telephone note, a
WhatsApp or
any scrap of paper from Nevhutanda as the acting DH
querying the authority of Kruger when he, as averred, during this
litigation
discovered that Kruger approved the 0443. There is simply
no key supporting evidence of the process and that the permission was
granted without authority. On the
Plascon-Evans
principle this
version of SARB in the main application as a defence is bald and
uncreditworthy and the version put up by Ibex in
the counter
application is to be accepted.
[50]
Even leaving facts aside, on a legal interpretation the lack of
authority claim falls short.
I accept that the first document one has
to turn to is the Delegation and that the signing limits document
does not give a person
power to grant permission, it is an internal
process regulating the different categories of people to sign-off a
particular approval.
The case made out in counter-application is
specifically that the 0443 "exceeded the designated official's
signing limit in
terms of the applicable signing limits." There
is no reliance on the delegation, but on the signature limits
document. The
approval of Payment 4 required the designated official
to refer it to the GEC, but he did not. It is not their case that the
Kruger
did not have authority in terms of the delegation. The case
thus revolves around the heading of the signing limits document with
the following instruction: "where the transaction value exceeds
R15 billion a submission to the GEC must be drafted, both
documents
must be submitted to your signing official/manager."
[51]
It was argued on behalf of SARB that the designated official's
signing limit was exceeded because
it was above R15 billion. If it
was above R15 billion he simply could not entertain it, end of story.
The oral argument went Kruger
had the delegated power, but it was
only to R10 billion and so to speak had to get it off his desk, and
pass it on to a designated
official with authority. Kruger cannot
give permission and then send to the GEC. He has no power to grant
approval. The Court must
apply a purposeful interpretation and there
must be a purpose to send to the GEC and the reason is it was above
Kruger's pay-grade.
This last argument is contrary to the SARB's own
case that the GEC cannot give approval. The case is never made out
that it was
not sent to the DH at the time.
[52]
This procedure of Kruger having to pass it to another official and
who this official must be,
is not on the papers. This argument is
also contrary to the plain reading of the delegation with the
instruction that a M1 official
in fact has the power to grant a R15
billion transaction but, must adhere to the instruction by drafting a
submission to the GEC;
he cannot do that if the application is off
his table. Upon an interpretation of the instruction he could not
approve it without
sending it to the GEC and then both documents to
the signing manager. The signing limits document does not even
require "approval"
from the GEC or for that matter from the
DH. The version put up by the SARB in the counter-application is
palpably implausible
and Ibex's version on the
Plascon-Evans
principle is to be accepted.
[53]
The document attached to the founding affidavit as the permission is
unsigned "o.b.o. DH."
It is not denied that Ibex received
all other approvals unsigned with "o.b.o DH " identical to
0433, but this is made
off as co-incidental. However, this Court can
in terms of
Plascon-Evans
use it a common cause fact from
which an inference can be drawn. It in fact shows that 0443 was
granted by a person with authority,
the DH. In the reply Nevhutanda
makes the new bald statement: "The Excon Delegation delegates
powers and functions,
inter alia
, to the Head, a Divisional
Head or authorised signatories in acting on the strength of the Excon
Delegation. However, in this regard
the Head of the Department, the
Divisional Head and Mr Kruger had no authority to approve the 0443
Application, and it would have
had to be referred to the required
duly authorised level for approval and the grant of permission."
No reason is provided
for this and no identification of this duly
authorised level is provided.
[54]
It is common cause that in June/July 2024 when Ibex sought to
implement 0443 the SARB raised
three objections as to why the 0443
could not be implemented. None relating to lack of authority and
those reasons have been abandoned
with no explanation for this change
in stance. The argument on behalf of SARB that there is nothing
controversial about Nevhutanda
stating that he knew nothing of 0443
because payments 1 and 2 were within Kruger's authority. Payment 4
was not yet on the table,
just like it is not now on the table, it's
only planned for 2026. Only when the urgent application came and
payment 4 featured
did the SARB realise that Kruger had no authority
to grant permission for payment 4. This argument is untenable because
payments
1-4 were applied for at the same time and approved at the
same time. It matters not that the execution would take place later.
In fact, the whole purpose of payment 4 was future payments.
[55]
Nevhutanda in the founding affidavit says he was not aware of the
amendments to the 0443 and
that Kruger had not conveyed the
amendments to 0443. He does not say that he did not know of the 0443
application and approval,
he specifies that the amendments to the
0443 triggered the investigation to lack of authority. In the
replying affidavit he then
admits that the senior officials at
FinSurve knew by whom the 0443 approvals were given, but then does
not divulge if this was
from the inception, or at what stage. In the
reply for the first time it is also divulged that Kruger knew that he
did not have
the authority to grant the 0443 permission with no
factual basis to support this allegation. If the senior management
knew that
Kruger had granted it, then the question remains why his
lack of authority was not raised earlier.
[56]
The approval attached to the replying affidavit differs from the
approval that was attached to
the founding affidavit in that it now
reflects an illegible electronic signature. Not a single word in the
reply as to whose signature
this is, where this now comes from, or
why it was not attached to the founding affidavit, but the SARB was
attempting to make out
a case in reply. This Court must have regard
to the principle that the more serious an allegation and its
consequences the stronger
the evidence must be before I can find the
allegation is established.
[7]
There is no doubt that now seeking a selfreview of permission
granted has serious consequences for the process Ibex has followed
to
pay its creditors and the SARB has not put up any evidence, let alone
strong evidence.
[57]
Counsel for the SARB submitted that if the Court cannot decide the
factual dispute pertaining
to the lack of authority the matter must
be referred to oral evidence. Contrary to Ibex's addressing this
issue in its papers this
relief now sought by the SARB was not
addressed or sought in the SARB's papers or heads of argument.
[58]
Rule 6(5)(g) of the Unfirm Rules provides that:
"Where an
application cannot properly be decided on affidavit the court may
dismiss the application or make such order as it
deems fit with a
view to ensuring a just and expeditious decision. In particular, but
without affecting the generality of the aforegoing,
it may direct
that oral evidence be heard on specified issues with a view to
resolving any dispute of fact and to that end may
order any deponent
to appear personally or grant leave for such deponent or any other
person to be subpoenaed to appear and be
examined and cross
examined as a witness or it may refer the matter to trial with
appropriate directions as to pleadings or
definition of issues, or
otherwise."
[59]
It is well-established that if the material facts are in dispute and
there is no request for
the hearing of oral evidence, a final order
will only be granted on notice of motion if the facts as stated by
the respondent together
with the facts alleged by the applicant that
are admitted by the respondent, justify such an order unless, the
court is satisfied
that the respondent's version consists of bald or
uncreditworthy denials, raises fictitious disputes of fact, is so
far-fetched
or so clearly untenable or so palpably implausible as to
warrant its rejection merely on the papers. If in such a case the
court
is satisfied as to the inherent credibility of the applicant's
factual averment, it may proceed on the basis of the correctness
thereof and include this fact among those upon which it determines
whether the applicant is entitled to the final relief sought.
[60]
As general rule an application for the hearing of oral evidence must
be made
in limine
and not once it becomes clear that the
applicant is failing to convince the court on the papers. The
circumstances must be exceptional
before a court will permit an
applicant to apply in the alternative for the matter to be referred
to evidence should the main argument
fail.
[61]
I cannot define a real, genuine and bona fide dispute of fact better
than the Supreme Court of
Appeal:
"[13] A real,
genuine and
bona
fide
dispute
of fact can exist only where the court is satisfied that the party
who purports to raise the dispute has in his affidavit
seriously and
unambiguously addressed the fact said to be disputed. There will of
course be instances where a bare denial meets
the requirement because
there is no other way open to the disputing party and nothing more
can therefore be expected of him. But
even that may not be sufficient
if the fact averred lies purely within the knowledge of the averring
party and no basis is laid
for disputing the veracity or accuracy of
the averment. When the facts averred are such that the disputing
party must necessarily
possess knowledge of them and be able to
provide an answer (or countervailing evidence) if they be not true or
accurate but, instead
of doing so, rests his case on a bare or
ambiguous denial the court will generally have difficulty in finding
that the test is
satisfied. "
[8]
[62]
When I consider the SARB's counter-application taking into account
the paucity of facts, the
lack of supporting evidence and documents,
the contradictions between the founding and relying affidavits
together with the common
cause facts, together with the facts set up
by Ibex no
bona fide
dispute of fact exists. I am satisfied
that there is no genuine
bona fide
dispute of fact raised that
needs to be solved by means of
viva voce
evidence and the
application for referral to oral evidence is dismissed.
[63]
Upon finding that there is not a
bona
fide
factual
dispute the only conclusion is that I should approach the
applications upon the assumption that Ibex's account of the
permission
granted is substantially true and correct, in the main
application and accept their version in the counterclaim.
[9]
I accordingly find on the merits that there was no lack of authority
and that the 0443 was granted with authority by the DH.
Ex
facie
the
0443 it is granted "o.b.o the Divisional Head." The 0443
was addressed to the DH by Ibex and the authorised dealer.
The
queries and answers thereto were addressed to and answered by the DH.
The unidentified DH knew of 0443 and nowhere is the averment
made
0443 was not sent to the DH. The previous approvals were also signed
as "o.b.o the Divisional Head".
[64]
This matter is urgent, comprehensive, complex, consisting of 5
lever-arch files with Counsel
arguing for two solid days requiring
judgment to be speedily delivered. In view of these factors and my
finding pertaining to the
lack of authority, I find it is unnecessary
to address the delay pertaining to the self-review or whether it
would be just and
equitable to set aside the 0443. I also do not
address the estoppel argument, except to
obiter
remark that
where the SARB itself relies on the signing limits documents as not
being adhered to, this internal document not falling
within the
knowledge of Ibex, it was entitled to assume that all internal
requirements had been satisfied. Ibex acted on the 0443
by realising
the funds with a meticulously planned strategy to achieve the best
value and to realise its assets in an optimal way
before June 2026.
With payment then refused, prejudice followed and estoppel would find
application.
[65]
In finding that payment 4 was granted with authority there is no
basis in fact or law to prevent
payment 4 and the decision is
reviewed and set aside.
Must
the blocking order over R200 million plus interest in the SAHPL
account be reviewed and set aside?
[66]
The reason provided by the SARB for the blocking order reads as
follows:
"on reasonable
grounds suspect[s] the Respondent [i.e.SAHPL] to have committed a
contravention or failure to act or omission
as provided for in in
Regulation 22A.(1) and/or 22 C.(1) of the Regulations, read with
Regulations 2,3,6,10,14,19 and/or 22.5."
The contravention or
omission was not identified. Mr Nannoolal [Nannoolal] issued and
signed the blocking order.
The
facts and argument on behalf of Ibex
[67]
It was submitted that even if one reads all the quoted Regulations,
the information in the blocking
order and the affidavits before
Court, it is impossible to determine on what basis any reasonable
suspicion was formed by Nannoolal.
He has not filed an affidavit and
accordingly no reasons are before the Court as to what was suspected
to be contravened and what
requirements were not met. The letter from
Bowmans, attorneys for the SARB, that accompanied the blocked orders,
informed that
the blocking orders flowed from the communications
regarding the implementation of 0443, however, this is not explained.
When the
settlement agreement was concluded no reason was forwarded
as to why the SARB insisted to continue with this blocking order
despite
the other blocking orders being uplifted. In the answering
affidavit filed after the settlement agreement was concluded no
reason
for this blocking order is given. It is common cause that the
decision to issue a blocking order is administrative action, but no
reasons for the decision is set out in the answering affidavit.
[68]
In the SARB's answering affidavit the only vague statement is that
the blocking order related
to: "suspected or known
contraventions of the entity in question at the time", and the
blocking of the funds was not
inexplicable or arbitrary. In the
replying affidavit it is stated that SAHPL itself "has admitted
having contravened, the
Regulations to the extent of at least ZAR 4.5
billion." No explanation is given and no supporting evidence is
provided. The
only averment is: "I submit that it seems that
Ibex, notwithstanding extensive engagement with the SARB in relation
to its
investigation pertaining to alleged contraventions of the
Regulations, wants to distance itself therefore under the guise of
'new
Management' whilst not accepting responsibility for the conduct
of Steinhoff as an entity. They furthermore seem to ignore the SARB's
mandate and obligations to act under the Regulations in respect of
contraventions therefore which are in the region of ZAR600 billion."
[69]
The only inference Ibex can make is that it referred to alleged
historic contraventions, but
is common cause that the SARB had
investigated the alleged historic contraventions and issued blocking
orders of approx. R6 billion
based on these findings. It informed
Ibex that it considered to forfeit the funds subject to the initial
blocking orders and on
19 July 2024 made a final determination to
forfeit R6.2 billion of these contraventions. The SARB was aware of
all the asserts
of the Ibex Group in South Africa prior to issuing
these blocking orders. The Regulations do not permit for multiple
forfeiture
decisions in respect of the same contraventions, but even
if it did, it would be unreasonable to do so.
[70]
The forfeiture of 19 July 2024 constituted a final decision as to the
censure of Ibex for the
historic contraventions. The
functus
officio
doctrine is accordingly applicable because Ibex cannot be
a continuous moving target; the SARB had discharged its office in
relation
to those contraventions. It is unlawful for the SARB to a
week, after the forfeiture decision, to block further funds for
historic
contraventions.
[71]
On behalf of Ibex it was argued that the SAHPL blocking order must be
set aside as it falls short
of the standards set out by all three of
these frameworks. Not in any of the affidavits of the SARB are any of
these bases displaced.
[72]
The SARB in the affidavit sets out that the that the reasons set out
in the letter of 11 July
2024 are not the reasons for the blocking
order; Ibex's failure to comply with its reporting obligations in
terms of 0443; any
contravention of the Regulations pertaining to the
acquisition and disposal of controlled securities by the current
management;
the funds being externalised being of a capital nature
for which specific prior approval was required.
[73]
The SARB baldly denied that its conduct was unlawful and this is done
by Nevhutanda who did not
issue the blocking orders. The SARB only
answered one of the reasons set up by Ibex denying that it had to
give a party an opportunity
to make representations before the
blocking orders were issued. With no reasons provided Ibex submitted
that the blocking orders
were issued solely for the unlawful purpose
of thwarting the implementation of 0443. It was argued that the
purpose of issuing
the 0443 blocking order on the day the SARB knew
an urgent application was to be served enforcing the 0443 was to
prevent exactly
that. The SARB has put up no cognisable defence to
the relief sought pertaining to the setting aside of the blocking
order.
The
facts and argument on behalf of SARB.
[74]
The facts set up in the answering affidavit pertaining to the
blocking order was that at the
time that the SARB issued this
blocking order, an amount of ZAR R200 million in excess of the ZAR R9
billion proceeds of the sales
of the Pepkor shares were also blocked
in respect of contraventions of the Regulations suspected to have
been committed by SAHPL.
The attachment of money by the SARB is in
terms of Regulation 22 A(1)(a) and or Regulation 22C(1) and the
prohibition from withdrawing
or causing to be withdrawn any money to
the credit of SAHPL is done in terms of Regulations 22A(1)(b) and/or
22C(2). These orders
by the SARB are generally known as blocking or
attachment orders.
[75]
Once the monies have been blocked the blocking or attachment remains
in place for 36 months for
FinSurv to conclude an investigation.
Suspicion is a state of conjecture and the investigation is to obtain
prima facie
proof. The suspicion is on reasonable grounds that
in future it will become necessary to recover the shortfall in
respect of the
contraventions committed by SAHPL. It is denied that
the blocking orders were issued for an obstructive purpose to impede
this
application, or the 0433 payments.
[76]
The blocking orders were lawful, reasonable and procedurally fair. A
designated functionary need
not provide reasons for the blocking
orders. An entity that has been blocked can ask reasons in terms of
Promotion of Administrative Justice Act 3 of 2000
. It is denied that
the letter of 11 July 2024 formed the basis of the blocking order, it
informed the reasons for the delay in
processing the transactions.
[77]
The blocking of the additional funds was not arbitrary as it related
to suspected or known contraventions
of SAHPL at the time. SAPHL had
admitted to contravening the Regulations to the extent of at least
ZAR 4.5 billion. The fact that
some of the funds may not have been
earmarked to be exported was not a relevant concern at the time. It
is denied that the financial
creditors were entitled to have been
given an opportunity to make representations before the blocking
orders were issued because
to give notice would defeat the purpose of
a blocking order, i.e. to preserve the funds or assets.
[78]
In the written heads of argument of SARB nothing more is said. In
oral argument much was made
of the fact that it was not common cause
that the investigations surrounding Steinhoff had been finalised and
that the Court can
take note from the newspapers that SARB had
recently gained access to further documents from Jooste; this is not
on the papers.
I was referred to a few paragraphs out of voluminous
submissions made by Ibex to the SARB, not referenced in the papers
before
Court, suggesting that there were new contraventions with
SAPHL admitting it had contravened to the amount of 4.5 billion and
on
that basis the SARB could never let billions go out of the
country. A blocking order is not a penalty but a recovery and the
SARB
has duty to ensure recovery. The global approval did not absolve
the group from contraventions.
Decision
on whether the blocking order must be set aside.
[79]
It is common cause that the blocking order relates to SAPHL,
unrelated to 0443 and is in excess
of the proceeds of the PPH shares.
The blocking order is sought to be set aside in terms of PAJA and
also in terms of
Regulation 22D
read with
section 9(2)(d)
of the Act
which provides that an aggrieved person may bring an application to a
competent court for the review of blocking orders.
[80]
I am well aware of the extremely important function the SARB has to
fulfil in South Africa relevant
to these applications before me:
"Here we are dealing
with exchange control legislation. Its avowed purpose was to curb or
regulate the export of capital from
the country. The very historic
origins of the Act, in 1933, were in the midst of the 1929 Great
Depression, pointing to a necessity
to curb outflows of capital. The
Regulations were then passed in the aftermath of the economic crises
following the Sharpeville
shootings in 1960. The domestic economy had
to be shielded from capital flight. Regulation 1D's very heading is
'Restriction on
Export of Capital'. The measures were introduced and
kept to shore up the country's balance of payments position. The
plain dominant
purpose of the measure was to regulate and discourage
the export of capital and to protect the domestic economy [T]he
exchange
control system is designed to regulate capital outflows from
the country. The fickle nature of the international financial
environment
required the exchange control system to allow for swift
responses to economic changes... Exchange control provided a
framework
for the repatriation of foreign currencies acquired by
South African residents into the South African banking system. The
controls
protected the South African economy against the ebb and flow
of capital. One of these controls, which we are here dealing with
specifically, served to prohibit the export of capital from the
Republic (unless certain conditions were complied with.)"
[10]
[81]
To achieve some of its objectives the SARB has draconian powers to
ensure compliance with its
purpose, mandate and Regulations. I also
understand that the Ibex group's actions stand to be scrutinised.
However, I am mystified
that an organ of state, when confronted with
reviews in terms of PAJA and s22 of the Regulations relating to its
approvals and
blocking order, sets out none of the required facts to
enable a Court to decide whether these decisions were lawful,
procedurally
fair and should not be reviewed and set aside. An organ
of state is not above the law and a Court can only decide on what is
on
the papers before it. I cannot be persuaded by emotive statements
from the bar that pensioners and businesses lost 90% of their
investments; it is not on the papers. I cannot make findings on
snippets of a "report" that was not before the Court
in the
papers. The attitude of the SARB was displayed by a remark from the
SARB's Counsel in open Court that if the SARB did not
set up enough
facts, then the Court dismissed their version on a lack of facts, not
on the merits, and they will just come back
to Court. But, it is
trite law that in application proceedings the notice of motion and
affidavits define the issues between the
parties and the affidavits
embody evidence. If an issue is not cognisable or derivable from
these sources, there is little or no
scope for reliance on it. If the
facts of the case are not sufficiently clear to indicate what a party
is relying on that party's
version is rejected on the merits. Where a
respondent alleged bald facts without any substantiating facts Ibex's
version on the
Plascon-Evans
Rule must be accepted because the
SARB had not set up a
bona fide
defence:
"[23] In
Wightman
t/a J W Construction v Headfour (Pty) Ltd and another
[2008]
ZASCA 6
;
2008 (3) SA 371
(SCA) paras 11 to 13, I had occasion to
consider the adequacy of allegations in answering affidavits in the
context of the rule.
What I said there applies with equal force to a
respondent who endeavours to raise a special defence as here. See
also
National Director of Public Prosecutions v Zuma
[2009]
ZASCA 1
;
2009 (2) SA 277
(CC) para 26. The alleged knowledge of the
respondents concerning the long lease was averred without reference
to any detail as
to when, where and how the information was
communicated to them. Such facts being peculiarly within the
knowledge of the first
appellant, his silence on the matter is
inexcusable and explicable only by the inference that the bald
allegation was false or
not capable of substantiation. As I have
pointed out the defence was not raised in the magistrate's court
proceedings, a fact which
is unexplained and merely strengthens the
inference. In these circumstances it cannot be concluded that a bona
fide defence has
been made out by the appellants founded on the
respondents' knowledge of the existence of a long lease."
[82]
The SARB cannot get past the first hurdle; on what was the suspicion
based? The person who formed
the suspicion is completely silent
thereon; no affidavit from Mr Nannoonal. There is a vague submission
that the suspicion is on
reasonable grounds that in future it will
become necessary to recover the shortfall in respect of the
contraventions committed
by SAHPL. This averment is not substantiated
by any fact, what contravention and what shortfall? The further vague
statement is
that the blocking of the additional funds was not
arbitrary as it related to suspected or known contraventions of SAHPL
at the
time. The Court is again not told what contraventions and at
what time. Ibex then takes the position that it could only relate to
historic contraventions. This is not denied !n the answering
affidavit, however, in oral argument, it is denied that the
investigation
on historic contraventions is finalised.
[83]
Pertaining to the averment of the self-admitted R4.5 billion
contravention there is no supporting
evidence or document to show
this. In oral argument the Court is handed up a voluminous document
[RA1 submissions to GEC], not
referenced in the answering affidavit,
and with no context, with facts not set up in the answering affidavit
and is of no help
to the Court. It was argued on behalf of Ibex if
one has regard to the whole report it is 100% against the submission
by the SARB
in that it acknowledges that there has to be a balancing
act between protecting the economy and the payments that Ibex must
make.
The SARB averring contraventions of up to amount of R6 billion
being bantered about is outlandish and not substantiated.
[84]
The SARB has not set out a single fact as to why the blocking order
was issued, why it is lawful
and why it should not be set aside.
These facts are peculiarly within their own knowledge and their
silence thereon is inexcusable.
It can only be concluded that there
is not a reasonable suspicion and the blocking order is to be
reviewed and set aside. The SARB
did not observe it heightened
standards required of it in litigation. The SARB was not candid and
did not place a full and fair
account of the facts before Court.
[85]
The remedy sought to set aside the blocking order is in terms of
PAJA. The decision to block
was not rationally connected to the
reasons set up by the SARB and there is no basis set up in fact or
law for the decision-maker
to block the funds [section 6]. As the
review will be granted in terms of PAJA I need not address the
application in terms of Regulation
22D read with section 9(2)(d) of
the Act which provides that an aggrieved person may bring an
application to a competent court
for the review of blocking orders.
The grounds for the setting aside are that the person who took the
decision did not act in accordance
with the relevant provisions or
did not have reasonable grounds to make such decision or the grounds
for making such decision did
no longer exist. I only need to
reiterate that with no facts placed before the Court by SARS the only
assumption is that there
were no reasonable grounds to make such a
decision.
Can
this Court grant prayers 5.2 and 5.3?
[86]
The remainder of prayer 5 in the main application relates to
directing the SARB to permit Ibex
to make any further payments in
terms of the 0443 Approval subject only to Ibex complying with their
reporting obligations under
the 0433 Approval to update the SARB on
the processes and external payments as and when same are being
implemented. Furthermore,
the SARB are to take no steps to prevent
Ibex from making further payments, including issuing an attachment
and/or blocking order
under Regulation 22A or 22C of the Exchange
Control Regulations. Directing that the seventh and eighth
respondents [FirstRand Bank
Limited and the Standard Bank of South
Africa Limited] are permitted to take such necessary steps to effect
and implement these
payments.
Ibex's
facts and arguments
[87]
On behalf of Ibex it was argued that the facts set up for such an
order is the pattern the SARB
had followed in this application. It
set out that the SARB's actions to stop the implementation of the
0433 and the subsequent
issue of the blocking order must be seen not
in isolation. In mid-July 2024 whilst Ibex was seeking to engage the
SARB on the implementation
of the 0443 the SARB forfeited the initial
blocked funds amounting to R6.2 billion. The forfeiture took place
while the SARB left
Ibex's letters and applications pertaining to the
0443 unanswered.
[88]
On 18 July 2024 at 14:30 the SARB's attorneys wrote a letter to Ibex
indicating that the SARB
is taking a decision to forfeit the blocked
funds and that the decision would be communicated in due course. The
attorneys for
Ibex immediately responded that the SARB had given the
following undertaking:
"It is our
instruction to inform you that our client hereby undertakes to
provide your clients reasonable prior notice, via
your office, of any
intended administrative action that our client may take against your
clients after consideration of the written
representations provide by
your client."
The
very next day, 19 July 2024 the forfeiture decisions were published
in the Government Gazette, despite the undertaking. The
undertaking
was given at the time that Ibex threatened an urgent application to
prevent forfeiture in circumstances where the review
pertaining to
the blocking was pending. It was argued that the letter stating that
a decision would still be made can only be incorrect
because the
decision must already have been made when forfeiture was published
less than 24 hours later. The only reply to seeking
the undertaking
to be adhered to was a letter attaching the forfeiture notices. It
was submitted that the SARB acted
mala fide
.
[89]
The funds were blocked [prior to the blocking orders in this matter],
despite the SARB approving
the restructuring and settlement process
after six years of engagement with Ibex. The SARB forfeited no matter
that Ibex had launched
a review against the blocking orders and this
was not yet decided. A date for this review has now been procured.
Ignoring the pending
review against the blocking order and just
forfeiting the money can only be
mala fide
.
[90]
Similarly, in this application, 0443 was granted and acting thereon
Ibex sold the Pepkor shares
and kept the SARB updated of the process.
Contrary to its own approval it prevented the implementation of 0443
and then issued
the blocking orders. In the settlement the blocking
orders were lifted bar the order against SAPHL. No reasons have ever
been provided
why these blocking orders were issued, or why it was
not lifted.
[91]
In the light of this pattern of unreasonable and unlawful conduct of
the SARB Ibex fears that
there is a real risk that the SARB will use
its draconian powers to prevent Ibex from making approved payments in
0443 in the future.
The SARB's exercise of its powers in this manner
constitutes an abuse; by denying the payments in terms of its own
approvals.
The
SARB's facts and arguments
[92]
It was submitted that the review application pertaining to the
forfeiture is not relevant to
this matter before this Court and by
introducing these irrelevant considerations in this application it
may unduly influence the
Judge who may well hear all these matters.
It would not be wise for a Court to make a finding of
mala fides
.
[93]
It denied that the SARB acted unlawful or untoward and the facts set
up by Ibex are noted in
the context of the subsequent settlement
agreement made an order of Court.
[94]
The SARB denied that it had to take any steps before issuing the
blocking order and specifically
that the financial creditors were
entitled to have been given an opportunity to make representations
before the blocking orders
were issued keeping in mind that a
blocking order can be defeated if notice is given thereof.
[95]
Ibex does not take responsibility but merely blames all of its woes
on "previous management."
Pertaining to forfeiture the SARB
has in the past fulfilled its legal obligation to allow for legal
representations pertaining
to forfeiture. There is no ground for an
apprehension by Ibex that the SARB would not continue to do so.
[96]
In oral argument it was submitted that the relief sought in prayer
5.3 is a blanket permanent
interdict against the exercise of public
power authorised in terms of the Regulations. If such an order is
granted the Regulations
will be amended by a final Court Order. It
would result therein that Ibex need not seek permission from anybody.
The flow of funds
will end with SIHPL and Ibex Investments to make
payments but in the chain as set out nobody in that chain has
permission or can
be immunised from seeking permission. The SARB
would not have objection to prayer 5.3 being granted if amended to
leave the second
applicant out [because payment 3 is now settled] and
that the entity in prayer 5.3 be limited to Ibex Investments, then
the prayer
would not be too wide.
[97]
SAPHL does not have permission from the SARB. A Court can set aside
the blocking order, but it
cannot order that SAPHL need not obtain
permission. It was submitted that the day after the Court sets aside
the blocking order
the SARB can obtain a new blocking order.
Decision
on whether this Court can grant prayers 5.2 and 5.3
[98]
A Court when reviewing an administrative action may grant any order
that is just and equitable,
including orders:
"(1)
The court or tribunal, in proceedings for judicial review in term sof
section 6(1), may
grant any order that is just and equitable,
including orders –
(a)
directing the administrator –
(i)
to give reasons; or
(ii)
to act in the manner the court or tribunal requires;
(b)
prohibiting the administrator from acting in a particular manner;
(c)
setting aside the administrative action and -
(i)
Remitting the matter for reconsideration by the administrator, with
or without
directions; or
(ii)
In exceptional cases –
(aa) substituting or
varying the administrative action or correcting a defect resulting
from the administrative action; or
(bb) directing the
administrator or any other party to the proceedings to pay
compensation;
(d)
declaring the rights of the parties in respect of any matter to which
the administrative
action relates;
(e)
granting a temporary interdict or other temporary relief; or
(f)
as to costs.
(2)
The court or tribunal, in proceedings for judicial review in terms of
section 6(3), may
grant any order that is just and equitable,
including orders –
(a)
directing the taking of the decision;
(b)
declaring the rights of the parties in relation to the taking of the
decision;
(c)
directing any of the parties to do, or to refrain from doing, any act
or thing the
doing, or the refraining from the doing, of which the
court or tribunal considers necessary to do justice between the
parties;
or
(d)
as to costs."
[99]
In terms of section 8 of PAJA a Court can thus order the SARB to
permit the approved payments
to be made in terms of 0443 [s8(a)ii)]
and in terms of 8(b) prohibit the SARB from blocking the funds again
if just and equitable
to do so.
[100]
Permission was sought in terms of 0443 and was granted. Payment 4's
permission was sought as future payments and
granted as future
payments, thus not having to again, in future, seek permission from
the SARB. Permission was necessary so that
Ibex could realise funds
to fulfil the future payments sought and approved. The flow of the
funds to achieve this was set out in
detail to the SARB and the SARB
was kept informed of the bookbuild and the intended payments. Upon a
reading of the approved 0443
the only interpretation is that Ibex
would sell South African assets to expatriate the proceeds to repay
its foreign debts without
further approval from the SARB. The SARB
had in the 0443 itself expressed that the amount to be paid would
depend on "the
underlying Pepkor share price, operating expenses
and the Rand/Euro exchange rate', acknowledging the future payments
upon realising
of the assets.
[101]
In the 0443 granted there is no express requirement for prior written
approval for payments 1-4, contrary to the
wording in payment 5. The
only requirement pertaining to payments 1-4 were that the SARB needed
to be updated "on the processes
and external payments as and
when same are being implemented, during the entire process." It
is common cause that this was
done.
[102]
In directing the SARB to permit Ibex Investment Holdings and SIHPL to
make any further payments in terms of the
0443 Approval subject only
to the entities complying with their reporting obligations under the
0433 Approval to update the SARB
on the processes and external
payments as and when same are being implemented, the Court is not
fulfilling or usurping the duty
of the SARB. The SARB had already
granted permission for the future payments. This Court is only
directing the SARB to act in accordance
with their own permissions
granted.
[103]
The next question is whether the Court can direct the SARB not to
take any steps to prevent Ibex Investment Holdings
and SIPHL from
making further payments, including issuing an attachment and/or
blocking order under Regulation 22A or 22C of the
Exchange Control
Regulations.
[104]
It was made clear by counsel for the SARB that the SARB could render
an order for payment of the 0443 by this
Court worthless by issuing a
blocking order the day after this Court issued its order. In terms of
the SARB's functions and powers
this is true, but a Court has to
ensure that its own order is obeyed, and if it is not going to be
obeyed, that there is means
to ensure compliance. This is especially
so where this Court has found that the SARB has not been candid in
these applications
and the blocking order issued was unlawful. A
blocking order's purpose is not to prevent payments that the SARB had
approved. If
a further blocking is issued as a means to prevent the
payment that the SARB had approved it is not the Court usurping the
powers
of the SARB, but the SARB abusing its powers.
[105]
Of further relevance is that in the settlement order the SARB had
agreed to: "The Reserve Bank shall not
issue any further
attachment or blocking orders in terms of Regulation 22A or
regulation 22C of the Regulations in respect of the
funds released
from the Blocking Orders in terms of this Agreement and which shall
be used for purposes of making payments in accordance
with this
Agreement." The prayer sought is thus in line with the
upliftment of the other blocking orders with payment to follow
the
upliftment and agreement that no further blocking orders would be
issued. I see no reason why where the blocking order is found
to be
issued unlawfully the same principle should not apply here.
Paragraphs 5.2 and 5.3 should be granted.
Costs
[106]
Both parties in their written heads of argument sought the costs of
three counsel. In argument on behalf of Ibex
this was persisted with
but counsel for the SARB submitted that this Court should only allow
the costs of two counsel. I am satisfied
that the costs of two
counsel should be allowed.
Other
issues
[107]
The fact that I did not address all the issues raised does not mean
that I did not consider same. The only other
issue raised on behalf
of the SARB was that the Treasury was not a party because only
Treasury can approve or block. Yet, the counterclaim
is not brought
by Treasury and the upliftment of the blocking orders and the
payments in the settlement agreement is made by the
SARB and not
Treasury. made little of this argument.
Order
[108]
[108.1] This application is enrolled as an urgent application,
dispensing with the forms and service provided
for in the Uniform
Rules of court and it is directed that the matter be heard as an
urgent application in terms of Rule 6(12) of
the Uniform Rules of
Court.
[108.2] The
decisions of the first and/or fifth respondents are reviewed,
declared invalid and set aside under Regulation
22A(1) and/or 22C(2)
of the Exchange Control Regulations, as set out in the following
orders:
108.2.1
the "order with regard to the prohibition of the withdrawal
of
funds in terms of the provisions of Exchange Control Regulation
22A(1) and/or 22C(2)" issued to the third applicant on
25 July
2024, attached as "FA5" to the founding affidavit; and
108.2.2
the "order with regard to the prohibition of the withdrawal
of
funds in terms of the provisions of Regulations 22A(1) and/or 22C(2)
of the Exchange Control Regulations" issued to the
first and
second applicants on 25 July 2024, attached as "FA6" to the
founding affidavit.
[108.3] It is
declared that the payments set out in Payments 1 to 4 of the 0433
Approval are capable of implementation without
further approval
required by the first respondent;
[108.4] The first
to fifth respondents are directed to:
108.4.1
permit the first and second applicants to make any further payments
in terms of the 0433 Approval ("the further payments"),
subject only to the applicants complying with their reporting
obligations under the 0433 Approval to update the first respondent on
the processes and external payments as and when same are
being
implemented; and
108.4.2
take no steps to prevent the first and second applicants from
making
the further payments, including issuing an attachment and/or blocking
order under Regulation 22A or 22C of the Exchange
Control
Regulations.
[108.5] It is
directed that the seventh and eight respondents [FirstRand Bank
Limited and the Standard Bank of South Africa
Limited] are permitted
to take such steps as are necessary to effect and implement these
payments.
[108.6] The first
to fifth respondents are to pay the costs of this application,
including the costs of two counsel on scale
C.
S.
POTTERILL
JUDGE
OF THE HIGH COURT
CASE
NO: 2024-085397
HEARD
ON:
12 and 13 February 2025
FOR
THE APPLICANTS:
ADV. M. VAN DER NEST SC
ADV. D. WIID
ADV. E.A. VAN HEERDEN
INSTRUCTED
BY:
Webber Wentzel
FOR
THE 1
ST
-5
TH
RESPONDENTS:
ADV. N.G.D. MARITZ SC
ADV. T. GOVENDER
INSTRUCTED
BY:
Bowman Gilfillan Inc.
DATE
OF JUDGMENT: 23 April 2025
[1]
Helen
Suzman Foundation v Judicial Service Commission
2018 (4) SA 1
(CC) para
[17]
[2]
Oudekraal
Estates (Pty) Ltd v City of Cape Town and Others
2004 (6) SA 222 (SCA)
[3]
Plascon-Evans
Paints Ltd v Van Riebeeck Paints
(Pty)
Ltd 1984 (3) SA 623 (A)
[4]
Director
of Public Prosecutions v Zuma
[2009] ZASCA 1
;
2009
(2) SA 277
(SCA) para [27]
[5]
Para 20 of founding affidavit
[6]
Helen
Suzman
matter
para [17]
[7]
National
Director of Public Prosecutions v Zuma
[2009] ZASCA 1
;
2009
(2) SA 277
(SCA) para [27]
[8]
Wightman
t/a JW Construction v Headfour (Pty) Ltd and Another
(66/2007)
[2008] ZASCA
6
;
[2008] 2 All SA 512
(SCA);
2008 (3) SA 371
(SCA) (10 March 2008)
[9]
Wightman
supra
para [23]
[10]
South
African Reserve Bank and Another v Shuttleworth and Another
2015 (5) SA 146
(CC)
paras [53] and [54]
sino noindex
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