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Capitec Bank Faces Backlash in State Capture Payback Case

Published September 21, 2023
9 months ago

In a stunning blow to Capitec Bank's authority, a recent court judgment has indicated that the financial institution may have to renege on its effort to obstruct a monumental R500 million settlement. This settlement would allow Regiments Capital to refund amounts that it illicitly extracted from the Transnet Second Defined Benefit Fund (TSDBF).



Capitec, along with its top brass, are now mopping up the remnants of their public image, worn down by the harsh court ruling. The TSDBF instigated legal proceedings against Regiments for losses it substantiates were brought about by Regiments' role in state affairs manipulation.


Regiments intended to acquit the TSDBF's claim by liquidating shares it circuitously owned via a 13-year-old Black Economic Empowerment (BEE) agreement with Capitec. Capitec resisted the settlement, pointing out that it would undermine the bank’s empowerment credentials, subsequently notifying Regiments shareholders of potential ramifications under the 2006 BEE contract aimed at retaining black shareholders.



However, the bank pivoted abruptly on its stance prior to the court hearing, drawing the ire of Judge Bashier Vally who described this about-face as a lack of good faith.


The bank has also been active in dishing out threats toward the TSDBF, Regiments, and its fellow BEE investors, cautioning legal action if they went ahead with the necessary transactions for the fulfillment of the settlement. Judge Vally further lambasted the bank for this stance, Citing either gross carelessness or deliberate intimidation as the probable motives.


Vally also expressed concern, stating that the bank seemed content to maintain Regiments as a shareholder despite the firm’s theft from vulnerable pensioners of the TSDBF. The judge concluded that losing a mere 0.7% of its BBBEE rating was apparently a trade-off the bank was willing to make, rather than sever ties with a discredited shareholder.


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