Firstrand defends client confidentiality case
FirstRand is awaiting the decision of the Cape Town High Court with regards to its application argued today to prevent Noseweek from publishing the names of certain of our customers.
FirstRand regrets that it was forced to go to court to deal with this issue and its actions should not be interpreted as an attempt to suppress the rights of the media. The Group has maintained an open and transparent dialogue with the press on all issues, both negative and positive. Noseweek has written numerous negative articles about FirstRand in the past, which have been spurious, factually incorrect and at times defamatory and we have not once made any attempt to stop them. The Group did not go to court today to "gag Noseweek", we are there on a point of principle - to protect our clients rights to privacy and protect them from unfounded defamation. We have only requested that client names should not be published. Given that Noseweek indicated its intention to publish customer details in its last edition the Group had no choice but act to protect our clients. We believe any client of any bank would expect its bank to act in this way.
With regard to the 'loop' structures mentioned by Noseweek, FirstRand confirms that positive legal opinions were obtained at the time the structures were implemented and individual customers also obtained their own independent legal opinions. These types of structures were offered by numerous financial institutions in South Africa. However on 30th September 2003 the South African Reserve Bank issued Exchange Control Circular D405 to all authorized dealers directing as to how these structures should be dealt with in terms of the amnesty process. The Group bought this directive to the attention of its clients and advised those who believed themselves to be affected on the unwinding of the structures, in accordance with the directive.
A positive legal opinion on the so-called "Duisberg structure" was also obtained at the time, and extracts from that opinion were read out in court today.
A great deal of highly selective information making allegations of illegal activities by FirstRand has been widely circulated, designed to embarrass us, mainly as a result of litigation the Group is facing from a disgruntled consultant, whose contract was terminated 7 years ago for his non-performance. This information has been given to the media and a wide range of domestic and international regulatory bodies, including the Financial Services Authority in the United Kingdom and the United States Treasury, none of whom have ever questioned the Group on his allegations.
We believe that this represents a concerted effort by the litigant to force the Group to settle out of court as his case is weak. FirstRand continues however to apply its legal options in a transparent and open way, to protect its clients interests in the face of malicious conduct by an individual. We will continue to pursue this litigation with vigor and we are pushing very hard to get this case to Court where all of these allegations will be dealt with in the appropriate manner.
