Sasfin slapped with R210 million fine

The Prudential Authority has hit Sasfin with a fine of R209.7 million, R49.1 million of which was suspended. 

In a SENS announcement released this morning, Sasfin informed shareholders that, on 1 August, it received notices of administrative sanctions from the Prudential Authority of the South African Reserve Bank (SARB).

The company explained that Sasfin Bank had received notifications from the SARB of its intention to impose administrative sanctions for alleged historic non-compliance.

The total net sanctions amount to R160.64 million. The total is R209.69 million, of which R49.05 million is suspended.

“These sanctions principally relate to allegations of historic non-compliance within Sasfin Bank’s discontinued foreign exchange business,” the company said. 

“Sasfin has and continues to work proactively and transparently with the relevant authorities and regulators.” 

Sasfin said it has taken legal advice and is considering further representations, which could result in a review or appeal of the sanctions in terms of the provisions of the relevant regulations.

The company’s foreign exchange business has been embroiled in several regulatory issues.

The South African Revenue Service (SARS) issued a civil summons for R4.87 billion plus interests and costs in the form of a damages claim earlier this year.

The summons was received in January, following SARS’s inability to collect income tax VAT and penalties allegedly owed by former foreign exchange clients.

Sasfin restructuring

In the same SENS announcement, Sasfin also announced that it had received regulatory approval to dispose of some of its assets for R3.25 billion as part of an ongoing restructuring.

The company plans to sell its Capital Equipment Finance and Commercial Property Finance businesses to African Bank.

The company said that the conclusion of the disposal marks an essential step in its strategic reset, where it plans to delist from the JSE.

In mid-July, Sasfin made an offer to minority shareholders that valued the company at R969 million.

The company offered minority shareholders R30 a share, a 65% premium to the 30-day volume-weighted average.

The company’s two biggest shareholders – Unitas Enterprises and Wiphold – are funding the offer. 

They will each subscribe for 7.5% of shares in Sasfin Wealth, whose management team is also buying into the business. Sasfin Wealth has an implied valuation of R500 million. 

“Our aim is to simplify the group and back our core businesses,” CEO Michael Sassoon said. 

“The backing of our major shareholders and management team will assist in rolling out our future strategy for the business.”

Sasfin has been reorganising its structure, selling its capital-equipment and commercial-property finance businesses to African Bank in February.

The company also exited its specialized lending and foreign-exchange businesses. 

Following the proposed cash subscriptions from Wiphold and Unitas, Sasfin Wealth will make an offer to buy as much as 10% in Sasfin Holdings.

The offer provides minority shareholders with the option to remain invested or exit at a substantial premium to the current market price.