LIQUIDATION DOCUMENTS
Update on Habib Overseas Bank
HAVING heard counsel, read the documents filed by the
parties and having considered the matter, the following, is by agreement
between the parties, made an order of Court.
IT IS ORDERED THAT
1. The curatorship of the first respondent is terminated with immediate effect.
2. The first respondent is hereby placed under provisional winding-up.
3. Ms Zeenath Kajee is hereby appointed as the
provisional liquidator of the first respondent and the Master of the High Court,
Pretoria is directed to appoint Ms Kajee as the first respondent’s provisional
liquidate within 48 hours of this court order.
4. All parties who have a legitimate interest in
the final winding-up of the first respondent are called upon to put forward their
reasons why this court should not order the final winding-up of the first respondent
on 19 September 2023, at 10:00 am or so soon thereafter as the matter may be
heard.
5. Any party who wishes file an affidavit in
support of, or in opposition to, the final winding-up of the first respondent
is to do so by 29 August 2023
6. Any responding affidavits are to be filed by 12 September 2023.
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Habib Overseas Bank Limited (“the Bank” or “Habib Overseas”) was placed into curatorship as of 26 March 2023 per the South African Reserve Bank (“SARB”) and Prudential Authority (“PA”). PricewaterhouseCoopers, represented by Craig Du Plessis, was appointed by the Minister of Finance to lead the curatorship of the Bank.
All branches and operational aspects of the Bank have been closed since
27 March 2023, to protect depositors and enable the curator’s team to undertake financial and operational assessments given the governance, compliance and operational failures.
On 21 July 2023 the PA and the SARB issued an application in the High Court in Pretoria for the winding up of Habib Overseas under Section 68 of the Banks Act
At this time however, the Bank remains under curatorship until such time as the court opines on the liquidation application, with the moratorium in place.
HABIB OVERSEAS ELIGIBLE DEPOSITORS
The outcome of the application for liquidation of Habib Overseas by the SARB and PA does not affect the status of these deposits of up to R100 000.
Please contact First National Bank (‘FNB’) on +2787 030 4561 or hob@fnb.co.za if you have not heard from them.
A depositor with more than R100 000 in their account, will continue to have a claim against Habib Overseas for the remaining balance after the payment of R100 000.
All customers, including depositors, are reminded to manage their financial affairs accordingly. This includes making alternative banking arrangements with regards to money coming into Habib Overseas (salaries, payments from suppliers etc.) and money going out of Habib Overseas (debit orders for medical aid, staff salaries, point of sale devices etc.).
Customers who have credit facilities from the Bank are legally obliged to continue to pay their monthly instalments in accordance with the terms of their agreements with the Bank.
Please refer to further documents on this website for more detail.
The Curatorship Team
Curatorship Related Documents
Dear Stakeholder, We hope that the below FAQs offer assistance in providing information (that we are currently able to share) on the curatorship process and operational aspects of the Bank.
Listed below are FAQ’s on the Curatorship.
- Where the Minister of Finance deems it desirable in the public interest, it may appoint a curator and place the bank under curatorship. Curatorship is to allow the curator, subject to the supervision of the Prudential Authority (“PA”), to manage the Bank in such a manner as the PA deems to best promote the interests of the creditors and the South African banking system as a whole, and the rights of employees in accordance with relevant labour legislation.
- The Bank was placed under curatorship due to compliance, governance and operational failures.
- The objective is to prevent a run on the Bank (where depositors withdraw their funds at the same or within a short period of time) and try rehabilitate/save the Bank.
- PwC with the representative being Craig Du Plessis.
- The Minister of Finance, on recommendation from the PA, appointed PwC as curator in terms of section 69(2) of the Banks Act, 1990. The curator exercises powers as bestowed on him by the Minister of Finance and the PA, as well as the powers envisaged in the Banks Act.
- Curatorship is governed by the Banks Act. Placing a bank under curatorship means that the management of the bank concerned shall vest in the curator, subject to the supervision of the PA, and any other person vested with the management of the affairs of the bank shall be divested thereof. Furthermore, the curator needs to recover and take possession of all the assets of the bank.
- The Banks Act and Minister’s appointment letter gives the curator the legal means to conduct the management of the bank in such a manner as the PA may deem best to promote the interests of the creditors of Bank, the South African banking sector as a whole and the rights of employees in accordance with the relevant labour legislation. The curator is to comply with any direction of the PA, keep accounting records, prepare financial statements, convene annual general meetings
- The Bank is monitored and regulated by the SARB. There was an exhaustive process with the SARB, and the board, management, and shareholders of the Bank to find a solution.
- While the Bank is under curatorship, the curator must report to the PA on a monthly basis.
- The curatorship team has been obtaining all relevant information in order to undertake a financial assessment of the Bank. A decision can only be taken once this work has been concluded.
- We are still busy with the financial assessment of the Bank and therefore not in a position to disclose anything further at this stage.
- This is an important consideration and applicable to any institution. We are still busy with the financial assessment of the bank and therefore not in a position to disclose anything further at this stage.
Listed below are FAQ’s on the Bank Accounts.
- The curator has the powers to introduce a moratorium (in this case the closure of operational aspects and branches of the Bank which does not allow depositors access to their accounts until further notice) to prevent a run on the Bank. The curator, subject to the supervision of the PA, is required to manage the Bank in such a manner as the PA deems to best promote the interests of the creditors and the South African banking system as a whole, and the rights of employees in accordance with relevant labour legislation. At this stage, the moratorium ensures this.
- The curator has the powers to introduce a moratorium (in this case the closure of operational aspects and branches of the Bank which does not allow depositors access to their accounts until further notice) to prevent a run on the Bank. The curator, subject to the supervision of the PA, is required to manage the Bank in such a manner as the PA deems to best promote the interests of the creditors and the South African banking system as a whole, and the rights of employees in accordance with relevant labour legislation. At this stage, the moratorium ensures this.
- Debit orders and other transactional activities should be transferred to other banks to allow you to meet your obligations. The depositor has the responsibility to manage their own financial affairs.
- Clients who have credit facilities from the Bank, are legally obliged to continue to pay their monthly instalments in accordance with the terms of their agreements with the Bank
- This is currently being assessed as part of the financial assessment and we will communicate accordingly when we are in a position to do so.
- We have sent emails to customers; however we are aware that some email addresses are incorrect. If you have not received any communication, please ensure that the Bank has your correct contact details. You are also encouraged to continue engaging with the branch managers who will try and answer your questions as best they can.
- Please liaise with your branch manager on this. You may be requested to provide the necessary information/documents to the extent required.
- Due to the large number of queries that we receive daily, at this time we are not able to deal with queries telephonically at all.
- We remain available on curatorhabiboverseas@pwc.com. Please also refer to https://www.habiboverseas.co.za for all related notices and we encourage you to continue engaging with your branch manager who will try and answer your questions to the best of their ability.
The application by the PA and the SARB to the High Court to place the Bank into liquidation
- On 21 July 2023, the PA and the SARB issued an application in the High Court in Pretoria, Gauteng (“Court”), for the liquidation of the Bank under Section 68 of the Banks Act.
The basis of their application for liquidation is that curatorship is no longer viable for the Bank due to the fact that the Bank is both factually and commercially insolvent in that its liabilities significantly exceeds its assets, it cannot pay its debt and there is no reasonable prospect that the Bank can become a successful concern.
Against the background of non-compliance, poor governance, operational failures, and concerns raised by the auditors of the Bank in respect of completeness, accuracy and reliability of financial information, the PA and SARB are requesting the Court to grant a liquidation order in the interests of the creditors (primarily comprising of depositors) of the Bank as a matter of urgency.
- The status of the Bank will change from being in curatorship to being in liquidation which means that the Bank will be wound-up in accordance with the Insolvency Act 24 of 1936.
Depositors of the Bank with more than R100 000 will have a claim against the Bank, which they will need to prove in due course.
- The liquidator as appointed by the Court. If the Court orders that the Bank be placed in liquidation, the curatorship will end. The curator will no longer have any powers and the liquidator will be in charge.
- Yes, customers who have credit facilities from the Bank, are legally obliged to continue to pay their monthly instalments in accordance with the terms of their agreements with the Bank. This remains the case whether the Bank is under curatorship or in liquidation.
- The Bank is still under curatorship, with the moratorium in place.
SARB payments of up to R100 000 per eligible depositor
- On 8 June 2023, the SARB communicated that it will pay up to R100 000 to each eligible Bank depositor. Depositors, who are not eligible for this payment, include the following:
– Depositors who have a balance of R100 or less in their account. These depositors will, nonetheless, retain their claim against the Bank; or
– Depositors who have not met the First National Bank (“FNB”) on-boarding requirements (further detailed below); or
– Any Bank deposit account held by a depositor that has been provided as security to any party.
The payment will be in full and final settlement of any and all claims against the Bank where an eligible depositor’s account balance(s) is more than R100 and less than or equal to R100 000.
- Yes, and this remains the case whether the Bank is in curatorship or in liquidation. If you haven’t heard from FNB as yet, you should contact them on +27 87 030 4561 telephonically or hob@fnb.co.za via email.
Of the total depositors of approximately 1900, an estimated 70% of eligible depositors will receive all of their money, once payments of up to R100 000 have been received by such depositors.
- A depositor with more than R100 000, will continue to have a claim against the Bank for the remaining balance after the payment of R100 000 is made. This claim will remain regardless of whether the Bank is in curatorship or in liquidation.
Please continue to be patient as we work through the emails received and seek legal advice on how to best manage the Bank’s activities going forward. The curator team continues to work tirelessly towards concluding the financial assessment of the Bank and a resolution, and we will inform you of further developments as soon as practicably possible. Please accept our most sincere apologies for any inconvenience and frustrations caused during this time of uncertainty.
The Curatorship Team
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