The High Court of Eswatini (formerly Swaziland) has upheld and defended the secrecy surrounding that country’s central bank. The court had been asked by the governor of the central bank for an interdict preventing a local newspaper from reporting on a leaked confidential document relating to Farmer Bank, Eswatini’s newest financial institution. When the Times asked the governor a number of questions relating to the central bank’s investigations on whether to grant the banking licence, he demanded an undertaking that ‘the report’ would not be published. And when the undertaking was not given, the bank went to court. The judge accepted that strict confidentiality had to be preserved ‘at all costs’ and that any leak could upset the country’s financial stability and impact on central banks ‘worldwide’. 

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Swaziland (now Eswatini) is hardly known as a land where transparency and free speech enjoy much value. Now the country’s High Court has helped maintain this reputation with a decision effectively closing down media investigation into the people behind Eswatini’s new Farmers Bank.

In January 2019, the Central Bank of Eswatini brought an urgent application against the Times newspaper. Heard by Judge Nkosinathi Maseko, the application was intended to prevent the Times from using information contained in a confidential report on the licence application of Farmers Bank.

Investigative journalist Welcome Dlamini had obtained the report, prepared by the central bank’s financial regulation department, while he was working on a story about Farmers Bank. The central bank maintained that the law provided for strict security and confidentiality about all its business and that for an employee or former employee to have ‘leaked’ the document to the media was unlawful.

Approached by Dlamini for comment about the circumstances of the licence approval, the governor of the central bank, Majozi Sithole, established that Dlamini had a copy of the report. Sithole told him the document was strictly confidential and required Dlamini to undertake not to publish his intended report on the document. When no undertaking was forthcoming, the central bank successfully applied for an interim order barring the newspaper from publishing. The matter was fully argued soon afterwards.

In his decision, Judge Maseko noted Sithole’s claim that the planned publication was an unlawful breach of the central bank’s privacy and ‘would cause irreparable harm” to the central bank, Farmers Bank and to the ‘integrity of the financial systems of the country’. Confidentiality had to be preserved ‘at all costs’ because of the potential consequences for banking in the country ‘and beyond’ of any disclosure. Such disclosure risked upsetting the banking sector’s and creating ‘an adverse risk with corresponding Central Banks world-wide’. The governor also argued that the matter was ‘not in the public interest’ and there was no reason for the public to be informed about it.

The newspaper agreed that the central bank should promote monetary stability but added it should also protect the country from ‘unscrupulous business people’. Investigations into the people wanting to set up a banking business were thus surely a matter of importance and of ‘utmost public interest’.

Judge Maseko was, however, unpersuaded. The law required the work of the central bank to be highly guarded and surrounded by ‘utmost secrecy and confidentiality’ with criminal sanctions for any breach. He thus granted, ‘with costs’, a restraining interdict, and barred the paper from publishing ‘information contained in a confidential report on Farmers Bank’s licence application’.

The result cannot have been unexpected: relations between the media and government institutions have long been strained around the issue of transparency, among others. Late last year the Media Institute of Southern Africa (Misa), pointed to a new report on the state of transparency in Eswatini. Misa commented, ‘Withholding public information from information-seekers by government and public institutions appears to be the rule rather than the exception in Eswatini.’

‘It is an open secret that a culture of secrecy still exists within the government and public institutions. As a result, public complaints of lack of access to information held by government and public entities abound.’

What the Times intended to publish may never be known. However, two months ago it ran a story that Canadian national, Alexandre Asfar, a board member, 100% shareholder and Chief Investment Officer of Farmers Bank, had been refused permission to operate a business in the UK’s financial services industry.

Our web search produced documentation by the UK’s Financial Conduct Authority (FCA) dated 5 February 2018, rejecting an application by Asfar and others. The FCA notice says that despite repeated requests for essential information this was not supplied. The FCA was not satisfied that the proposed business was ‘ready, willing and organised to comply with the requirements and standards’ of the UK’s regulatory system.

A body wanting to be incorporated in the UK needed to have its head office and registered office there too. This was not the case with Asfar’s firm. In the view of the FCA, the firm was not capable of being effectively supervised. It failed to provide essential information ‘requested on a number of occasions’. It had also not shown its ‘suitability’ as ‘fit and proper’ to be allowed to operate in the UK, particularly in its failure to be ‘open and co-operative’ in its dealing with the FCA.

The exact nature of the intended business, Worldwide Central Repository, was not entirely clear from the FCA documents, but the FCA said it had applied to carry on the ‘regulated activities of entering into a regulated credit agreement as lender (excluding high-cost short-term credit, bill of sale loan agreement and home credit loan agreement)’.

The Times also ran a story in January, just months after Farmers Bank was due to open its doors, saying it was being sued for E459 950.79 (about $31 000) by Chubb Electronic Security for services rendered.

Judge Maseko, who presided in the interdict case, is no stranger to cases involving press freedom. At the time of his appointment to the bench, local media ran a story about his contribution to the law via several “landmark judgments” in his former capacity as Director of Public Prosecutions. Among these was the controversial contempt of court and media freedom case against the Nation editor Bheki Makhubu and human rights lawyer Thulani Maseko, in which he urged that the court should pass the ‘harshest sentence’ on them to deter others.

By the time the matter reached the appeal court, however, the trial judge had been arrested for corruption. And at the start of the appeal counsel announced that the DPP would not oppose the appeal, having now reached the conclusion that the conviction was ‘unsupportable’ and that the prosecution had failed to make out a case in the High Court.

* “A Matter of Justice”, Legalbrief, 4 May 2019