An attempt by the National Credit Regulator (NCR) to suppress disclosure of a key piece of evidence showing how banks were repossessing homes and then selling them at auction – sometimes for less than 10% of their market value – was defeated in court last week. Moneyweb reports that the Lungelo Lethu Human Rights Foundation has brought a R60bn class action suit against the banks for selling repossessed properties at below market value, thereby depriving South Africans of equity built up in their homes. ‘This is a major victory in our class action suit against the banks,’ says King Sibiya, president of the foundation. ‘We are bringing this class action suit because the NCR, which is supposedly there to protect the consumer, failed to do so,’ says Sibiya.
The NCR had applied to the Gauteng High Court to interdict Advocate Douglas Shaw, statistician Garth Zietsman and some 200 others involved in the class action suit from disclosing confidential information obtained while Shaw and Zietsman were doing work for the NCR. The NCR previously said it was unethical and unlawful for Shaw and Zietsman to use the information they obtained from the NCR for their own litigation. The court disagreed with the NCR’s argument. ‘This removes a major barrier to getting a date for the certification for our class action, which has been delayed for almost a year by this NCR application,’ said Shaw. In an affidavit before the court, Zietsman highlighted some shocking cases of property repossessions. In one case, a R1.3m property was sold for R1 000. In this case, the lending bank was FNB. Standard Bank and Nedbank also had several properties selling at auction for R1 000 when the market value was R200 000 to R440 000.