VENTURES AFRICA – Standard Bank has been ordered by a court to pay R528 million ($60 million) into a union pension fund, invalidating a 2002-2007 deal and ruling that the bank had dealt with the fund’s shares improperly.
The trustees of a pension fund owned by the South African Commercial, Catering and Allied Workers Union (SACCAWU) had lent the bank R160 million-worth ($18 million) of shares for a five year period in 2002, which Standard Bank repaid in 2007 along with agreed returns.
The court has ruled that the initial loan was invalid and that Standard Bank should hand over three million shares in mobile phone group MTN, along with 72,595 in media conglomerate Naspers and stock in ElementOne and Avusa, according to Reuters.
“Had the pension fund just kept the shares and not lent them to Standard Bank to utilise and take the benefits and dividend and growth, the pension fund would have been better off to the extent of anything between 500 and 700 million,” said fund curator Tony Mostert.
Mostert had been appointed custodian of the pension fund’s shares in 2002, instead of the trustees.
The bank, which has 14 days to appeal the court’s decision, confirmed it was obtaining legal advice and said in a statement: “The arbitrator has made an award on some of the issues and has yet to hear evidence and/or argument on the balance. As the arbitration is a private process and ongoing we prefer not to say more about it at this stage.”
It has not been a good few days for Standard Bank in court. On Wednesday it lost a case in the Supreme Court of Appeal (SCA), with the court ruling in favour of the National Credit Regulator (NCR) that Standard Bank had charged excessive administration fees on home loans.
Seen as a boost for consumer rights, the case came about after the NCR received complaints about charges exceeding the maximum as dictated by the Usury Act, which states that no money lender can charge a borrower any amount exceeding R5 for administration fees.
“We started investigating Standard Bank after we received complaints from Standard Bank home loan clients about the excessively high administration fees that Standard Bank introduced to existing home loan agreements following the introduction of the NCA”, says Annemarie Friedman, Senior Legal Advisor at the NCR.
“Consumers who entered into home loan agreements prior to 01 June 2007 where mortgage amounts were less than R500 000.00 should check their bank statements to establish whether they have been overcharged on their home loan administration fees and should approach the NCR or Standard bank”, she said.