AYO Technologies CEO Howard Plaatjes has lashed out at First National Bank’s (FNB) decision to shut down the company’s accounts, saying it was engaged in “aggressive action”.
On Thursday, AYO Technologies informed its shareholders that the company was given notice by FNB of the closure of its transactional accounts and that it had launched legal proceedings against the bank.
“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 statement.
Plaatjes said banks being able to close accounts without providing reasons leads to suffocating businesses and growth in South Africa.
AYO has said in court papers that FNB’s decision would lead to more than 1 200 job losses.
“Banks know that these businesses don’t have deep pockets to spend on litigation and they take advantage of it.
“With respect to AYO, if we don’t have bankers, it means the death of our business. We all know that the ICT sector needs transformation. There are very few ICT companies of AYO’s stature,” said Plaatjes.
The company’s removal from the JSE will have a “devastating impact” on over 4 000 employees and their dependents, he said.
He added that having a significant competitor removed from the marketplace would be a setback for transformation. “It will allow old monopolies to go uncontested and our country just can’t afford it.”
The Black Business Chamber (BBC) slammed FNB’s closure of AYO’s banking accounts without providing reasons to the company.
“The BBC is disappointed and angry at the actions of First National Bank (FNB) to close AYO’s banking account. This is even more disturbing, when according to the statement from AYO, FNB provided no reasons for the closure of its accounts,” the organisation said.
Nadiah Maharaj, FNB’s chief risk officer, said: “FNB can confirm it has given reasonable notice to terminate its banking services to the client concerned. Due to the confidential nature of our client relationships, we cannot provide any further details on the matter.”
Political Bureau