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Former President Jacob Zuma's FNB Accounts Restricted by High Court in order to recover R2.9-million plus interest

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louis Buyisiwe

Mar 21, 2024

Court orders FNB to freeze payments

“The accounts are not closed as incoming payments are unaffected. This instruction from the court results from the process currently being managed by the VBS Bank liquidators, and FNB was legally required to comply. Former president Zuma’s recourse now lies with the courts and VBS liquidators,” the bank said in its statement.  In August 2022, the Pietermaritzburg High Court ordered Zuma to pay R6.5-million with interest at the rate of 10.5% calculated from 31 August 2019 to date of final payment.
Ex-South African President Jacob Zuma

In a significant development, First National Bank (FNB) announced on Wednesday that it has been mandated by a High Court ruling to impose restrictions on the outgoing transactions of Jacob Zuma's bank accounts. This directive is part of the ongoing legal proceedings involving the liquidation of VBS Bank, with the former South African president caught in the crosshairs due to financial obligations ordered by the Pietermaritzburg High Court.

Legal Compliance and Account Restrictions

FNB clarified in its statement that the restrictions do not entail the closure of Zuma's accounts. Incoming transactions remain unaffected, highlighting the bank's adherence to the legal framework. "The instruction from the court results from the VBS Bank liquidators' process, and FNB's compliance is mandated by law," the bank stated. The situation places Zuma in a position where his next steps would involve legal recourse with the courts and the VBS liquidators.

Financial Obligations and Court Orders

The backdrop to this development traces back to August 2022, when the Pietermaritzburg High Court held Zuma liable for a payment of R6.5 million, accruing interest at an annual rate of 10.5% from 31 August 2019 until the full settlement. A writ of execution served to FNB on 29 February aimed to secure R2.9 million from Zuma's accounts, with an interest rate of 10.25% per annum from the same starting point, according to documents reviewed by Daily Maverick.

Political Dynamics and Settlement Attempts

The enforcement of this court order comes amid political controversies, with the MK Party voicing concerns over the timing of the bank's actions. These concerns emerged particularly after Zuma's endorsement of the party for upcoming elections, as reported by Jacaranda FM. Initially, the matter was removed from the court docket in April 2020 due to mutual agreement and pandemic-related restrictions. Subsequent ad-hoc payments by Zuma had led liquidators to anticipate a resolution, which now remains uncertain.

Implications and Next Steps

This unfolding scenario underscores the intricate ties between legal, financial, and political realms in South Africa. As Zuma navigates through these complexities, the broader implications on financial institutions' operations, political alignments, and legal precedents in the country are keenly observed.

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