Standard Bank slapped with R528m fine

2012-12-07 08:12

Johannesburg - Standard Bank Group [JSE:SBK] has been ordered to pay R528m to a union pension fund after a court ruled this month that it had dealt in the fund's shares improperly.

Trustees of a pension fund belonging to the South African Commercial, Catering and Allied Workers Union (Saccawu) lent Standard Bank shares worth nearly R160m in 2002 for five years.

The bank repaid the pension fund in 2007 and also handed over guaranteed returns agreed in its contract.

However, a court invalidated the deal this month, saying the initial loan of the shares should never have happened.

In its ruling, the court said Standard Bank should surrender nearly 3 million shares in mobile phone group MTN Group [JSE:MTN] and 72,595 in media giant Naspers [JSE:NPN] - some R528m based on Thursday's prices.

It also has to hand over more stock in ElementOne and Avusa [JSE:AVU], which have since been delisted and are therefore difficult to price.

"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 R500m and R700m," pension fund curator Tony Mostert said.

The bank has 14 days to appeal the court's December 3 decision and said it was awaiting legal advice.

"The arbitrator has made an award on some of the issues and has yet to hear evidence and/or argument on the balance," it said in a statement. "As the arbitration is a private process and ongoing we prefer not to say more about it at this stage."

The court appointed Mostert custodian of the pension fund's shares in September 2002 in place of the trustees.  

  • brionyl.french - 2012-12-07 08:26

    oh oopsie

      hamish.drake1 - 2012-12-07 08:57

      Time to change banks, cause you know where they going to get their fine money.

      adrien.mcguire - 2012-12-07 17:38

      Ok, so here is my take on this matter. Assuming Standard bank loses any appeal, then the 'fine' should be paid by the directors and not the shareholders and customers. If the directors authorised an illegal event, and the bank benefitted, then the directors would have all received performance bonuses as a result. As such that makes them liable for the fine too. The whole reason for the current financial crisis is that staff of financial institutions are gambling with shareholders money, with only an upside for themselves. If a dodgy deal goes well, then they take huge bonuses...... but if it goes badly then the shareholders pay. Enough is enough. Shareholders need to stand together in this matter !

      adrien.mcguire - 2012-12-07 17:53

      Ok, so here is my take on this matter. Should Standard Bank lose any appeals on this matter, then any 'fines' should be paid by the directors of the bank, and any staff who received bonuses relating to this deal. The reason for the current financial crisis is that directors are gambling with shareholders money, with only an upside for the gamblers. They all receive huge performance bonuses as a result of their dealings. There is no downside to their gambling as, if it goes wrong , then the shareholders pick up the cost of the bad deals. Shareholders need to stand together on these matters as this is the rot that runs thru the financial industry.

      adrien.mcguire - 2012-12-07 18:21

      Sorry for the repeat but the first comment didn't appear so I re-did it ! But seeing it twice emphasises the point !

      andrew.hendrikse - 2012-12-07 18:32

      All banks are the same!! They know how to take but don't know how to give back!! Its called stealing!!

      beverly.young3 - 2012-12-08 01:10

      If my memory serves me.........STD have been in trouble before. I seem to remember them having to sell their buildings, and some or other major disaster when they were caught short over loans. 90's. Personally, I wouldnt touch them with a barge pole! I used to work for a finance company, and they were the worst offenders of overcharging on bonds, and overdrafts.

      Jack - 2012-12-08 07:16

      Yes, prison time for StandardBank directors..

  • dmwiggett - 2012-12-07 08:38

    These are the usual workings of a money grabbing financial institution, rip off the clients to make profits for the shareholders and yourself. As the bank (Senior peoples who made the decision) you get a pat on the back from the people who really matter to you. Shareholders no 1 clients a very distant second...

  • conrad.marshall - 2012-12-07 08:48

    "The court appointed Mostert custodian of the pension fund's shares in September 2002 in place of the trustees. " so the Trustees of the fund is also to blame for this.... tch tch tch.... greedy bunch.

  • seventhheavenproperties - 2012-12-07 08:51

    Thank you Reuters for this article.

  • dmwiggett - 2012-12-07 08:51

    This seems typical of banks and financial institutions, make money for yourself and the shareholders first then maybe make some money for the clients, in fact if this harms the client so be it as long as the priority no 1 (shareholders) is happy and patting you (the bank and the senior people making these decisions) on the back. Shareholders and profits no 1 clients a very distant no 2 and that is true in any business. e.g. Pick n pay care about the people... Ya right, profits are down so they retrench the people at the bottom of the proverbial staff ladder who really need the R3.5k per month they are getting paid..

  • dave.elmore.5 - 2012-12-07 09:11

    Oh goody...

  • bretton.eveleigh - 2012-12-07 09:15

    Not to worry Standard Bank exec's... we'll just push up banking fees a little to compensate... Std Bank won't pay, but their clientele will!

  • leonard.maseko - 2012-12-07 09:35

    Standard Bank bites the dust :-)

  • sabelo.mcondobi.7 - 2012-12-07 10:14

    Can't say l am surprized with Standard Bank...its overcharging its clients. Socially it contributes very little in builiding society to assist govt. It is losing many clients with poor service they are offering. Comparing to other banks. l hope they lose the appeal too

  • zolisa.dlokovu - 2012-12-07 10:35

    Lol. Standard Bank - one of the most expensive banks in Mzantsi.

      zizzy.sipondo - 2012-12-07 12:24

      Not true

      margaret.pula1 - 2012-12-07 18:50

      I concur, zizzy, not true that std bank is most expensive, so are all the other RSA banks, it`s just like comparing Shoprite and Pick n Pay prices. I have no prob wirh std bank services

  • alan.davis.5249 - 2012-12-07 11:15

    There goes the bank rates and charges UP AGAIN. Behaving like the Ruling Party ( maybe they are the same?).

  • marc.moon.10 - 2012-12-07 11:54

    standard bank, 100 years of moving forward at your expense...

      marc.moon.10 - 2012-12-07 11:55

      sorry that should read "standard bank, 150 years of moving forward at your expense..." oops :)

  • - 2012-12-07 13:27

    Think I will just stay with Capitec, No drama and no problems. and voted the best bank in south Africa.

  • motlalepula.sompane - 2012-12-07 13:42

    am i the only who thinks this fine will only affect their Balance Sheet? why the hell would they increase fees? unless it to compensate for the expected dividend income. uh well - time for you folks to make a move?

  • stephen.j.dickson.3 - 2012-12-07 15:05

    This is good news to me. Why am I not surprised??? Standard Bank is the absolute pits with ultra poor service, philistine pig arrogance and manned by stupid,inept incompetents. Just wish the fine was a lot bigger like 5.3 billion rand so that the high ups like that wet CEO Jaco Maree could have their asses kicked and their heads delivered to the share-holders on a plate. Bloody mampara nyamazuns.........bottom line.

  • igshaan.abdullah.3 - 2012-12-07 23:21

    The fine should have been much, much higher.Banks are the most corrupt sector of our society!

  • ike.jakson - 2012-12-08 08:36

    There is much more behind this story than this article reveals on the matter. It seems certain that one hand greased the other at the time of the loan of the shares and another hand that wants some grease years after the event. Who are they trying to fool? This kind of story always has three sides or versions. We have heard the Union version and a tiny bit of the Standard version. What we now need is the third side, generally referred to as the Inconvenient Truth.

  • mmoledis - 2012-12-08 14:14

    This is my bank, but if it practices actions that will compromise my investement with them then I rather quit and look for another bank to take care of my assets and monies. Good practice is needed and no one should do any wrong to harm another in any way.

  • lsmalope - 2012-12-09 12:24

    excuse my ignorance but in cases like this what happens to the money already paid by Standard Bank to the unions? Is it returned to Standard Bank or e jelwe?

  • ike.jakson - 2012-12-09 14:31

    For your fun if you would:

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