It ain’t against the law

Mosebenzi Zwane.

Mosebenzi Zwane’s ridiculous statement, purporting to have emanated from the cabinet, isn’t what we should be annoyed about, nor should his steadfast refusal to answer questions about that statement in the National Assembly, or for that matter House Speaker Baleka Mbete’s disinclination to hold him to account.

What we should be annoyed about, is the suggestion that the banks which chose to stop doing business with Oakbay Investments (that little company which belongs to the Gupta family), in some form or fashion broke the law.

For reasons beyond fathoming, there seems to exist a perception in this country that institutions of business are not entitled to choose with whom they wish to do business.

The last time I checked, it is entirely at the discretion of a business organisation whether or not it will engage with you either to render services, or to supply a product.

There is no act of Parliament, which dictates that a business organisation, or any institution for that matter other than a public institution, is obliged by law to do business with any person or organisation which may approach it to do so.

If we lived in a Communist country – and there are without doubt a great number of players in our political milieu who would like it to be so – it may well be very different, but the fact of the matter is that we live in what purports to be a democratic society, subject to a magnificently written Constitution, which neither compels no obliges any institution or organisation to engage with any other institution nor organisation, or person for that matter, against its will.

This is at the heart of the debate about whether South Africa’s major banking institutions broke the law when they chose to withdraw their banking services from Oakbay Investments.

Unfortunately, Vladimir Len-in’s homily that “a lie told often enough becomes the truth” seems to have gained traction in our political discourse, which perhaps explains why the narrative that these banking organisations in some form or fashion committed a crime, is now accepted as a truism.

Whether or not the cabinet, or the president for that matter, choose to launch the judicial commission of inquiry which the good minister Zwane erroneously stated had already been done, remains to be seen, but either way, there are some important unanswered questions.

If the Gupta family, who are major shareholders in Oakbay Investments, feel as aggrieved as it is purported they do, why on earth did they not approach the courts for relief? Instead, they chose to flee the country. Why?

According to a press statement by Finance Minister Pravin Gordhan, the chief executive officer of Oakbay Investments approached him and asked him to intervene with the banking institutions.

Why was that approach made, rather than an approach to the courts? But this is a question to which we all know the answer: what court action could not hope to achieve, behind the scenes political pressure may well have done.

Even if a judicial commission of inquiry were to be launched, would it be in any position to conclude that the banking institutions had in some way or other broken the law?

Since there is nothing on the statute books which compels any person or institution to do business with any other person or institution, the answer can only be a resounding NO.

A banking institution can choose whether or not it wishes to provide me with banking services upon my application, or for that matter to terminate a banking relationship when it perceives that the risk in that relationship outweighs the reward that it enjoys.

Business is after all, all about risk and reward, and although the banking institutions in question were circumspect in explaining why they had done what they had done, it was as plain as the nose on your face they perceived the potential risk of continuing to do business with Oakbay Investments (read: the Gupta family) significantly outweighed the potential rewards. It wasn’t personal, it was business.

No laws were broken. All the banking institutions did was to exercise their constitutional right to freedom of association.