Sasfin hit with R160m fine from Prudential Authority, after SARS already put in claim for billions

Sasfin Bank has been slapped with a R160 million fine by the Reserve Bank's Prudential Authority (PA).

This constitutes administrative sanctions imposed due to the 'historic noncompliance' of Sasfin's discontinued foreign exchange business.

In February, Sasfin confirmed it was facing a claim of R4.87 billion from the South African Revenue Service in damages SARS says it suffered due to tax losses facilitated by the bank.

Sasfin advised shareholders on Tuesday that it had received sanctions notices from the PA on 1 August.

It said the net sanctions amounted to over R160 million, as around R49m of the total of more than R209m is suspended.

While Sasfin continues to work proactively with the relevant authorities, it's taken legal advice and is considering further representations which could result in a review or appeal of the sanctions, Sasfin Holdings said in a Sens statement.

Stephen Grootes gets comment from Zwelakhe Mnguni, co-founder and chief investment officer at Benguela Global Fund Managers.

Mnguni says the PA didn't have an option in terms of levying penalties, otherwise they would set a bad precedent for violating forex rules.

"There have been all sorts of rumours about people who've been working at Sasfin being on the payroll of some who were money laundering, and those (foreign exchange transaction) deletions were essentially there to hide the activities of those individuals."

"So, it's not necessarily Sasfin per se, but again you are as good or as bad as the employees you hire..."

Zwelakhe Mnguni, CIO - Benguela Global Fund Managers

When it comes to the billions being claimed by SARS, they've set the bar very high for a reason Mnguni says.

"That's if the battle gets protracted... where the bar is set it is very high and to some extent unrealistic, but I think it would be fought back to a point of settlement at some point."

Zwelakhe Mnguni, CIO - Benguela Global Fund Managers