Maria Amakali
Edgar Brandt
Trustco Group Holdings on Friday vowed to continue the fight against the Trustco Bank’s suspension by central bank authorities after the Windhoek High Court ruled against the private family-owned business. Deciding on an urgent application, the court ruled that Trustco’s loss of income due to its inability to collect debit orders from clients does not warrant for their case to jump the court’s queue.
Trustco Bank approached the High Court in August, seeking an interim court interdict against the Bank of Namibia (BoN)’s directive to suspend its operations from 18 August. It further wanted the court to order the central bank to withdraw and/or reverse all instructions emanating from the suspension given to the Payments Association of Namibia (PAN) and Namclear.
However, the interim interdict remains in force until the court pronounces itself on the review application.
The central bank temporarily suspended Trustco Bank, a subsidiary of Trustco Group Holdings (TGH), with immediate effect for six months on condition that the local bank rectifies stipulated conditions.
In his ruling on Friday, judge Boas Usiku said the monetary loss that Trustco Bank claims it might suffer if the matter is not heard on an urgent basis is not the kind of loss that justifies jumping the queue.
“The inability of the first applicant (Trustco Bank) to collect debit orders as well as perform other banking services are the normal consequence of a suspension decision,” he said.
Usiku observed that if the matter is heard in due course, Trustco Bank will still be able to prove its case and obtain substantial redress, should the court rule in their favour.
Dismissing the urgent application and striking it from the court’s roll, he likewise ordered Trustco Bank to bear the cost of the suit.
In their application, Trustco argued that should the court not grant the interim interdict, BoN would be successful in its unconstitutional attempts to suspend its banking operations.
They further said BoN will succeed under the guise of regulatory supervision to take the law into their own hands, despite the undecided pending litigation and court proceedings.
However, BoN said Trustco Bank’s suspension is not final, but is the first step in a process to ensure that it meets its obligations within six months.
BoN said if the court grants the interim interdict, it would set a bad precedent that financial institutions do not need to comply with what the regulator tells them to do.
Furthermore, it would create an environment where banking institutions are not deterred from failing to comply with their conditions of licensing, or with the orders and directives issued by the regulator.
Trustco Bank will not suffer prejudice if the orders are not granted, as they can make submissions to the central bank within 14 days to persuade it to amend the suspension. BoN stated that during the suspension period, customers will still have access to their deposits at Trustco Bank. The bank is also permitted during the suspension period to accept repayments from its creditors, in compliance with such creditors’ loan repayment obligations existing as of the date of the notice of suspension.
Responding to the court’s decision, Trustco Group CEO Quinton van Rooyen said the company will always comply with any lawful and reasonable instruction from any regulator or higher authority.
“We will always oppose tyranny and unjust instructions. That is the DNA of Trustco. This saga remains far from over.
While disappointed by the urgency dismissal, Trustco always follows the rule of law. This is just one interlocutory judgement in an interim matter in extensive ongoing legal proceedings. Courts are where ordinary citizens like us seek to have disputes resolved and establish the law, if required” Van Rooyen continued . -mamakali@nepc.com.na – edbrandt@nepc.com.na