Sarb probes DA finance chief’s firm over R4bn transfers

An explosive affidavit by the South African Reserve Bank (Sarb) alleges that Kastelo, a fintech group founded by DA federal finance chairperson Mark Burke, misrepresented its business activities to authorities in a bid to “circumvent” the country’s exchange controls.

A legal battle is raging between Kastelo, chaired by Burke and run by his brother Nicholas, and Sarb over the freezing of some of its funds held with Access Bank.

The central bank put a block on the company’s funds in November, but not before Kastelo had externalised about R4bn as part of its business dealings.

The affidavit, penned by André Malherbe, an investigator at the central bank’s financial surveillance department, has flagged Kastelo’s business model as being based on “conjecture and speculation” and stated that there was systemic circumvention of the individual single discretionary allowance (SDA) and foreign investment allowance (FIA).

In essence, the Reserve Bank suspects Kastelo uses third parties’ SDAs and FIAs to externalise funds for its own benefit, which is forbidden by law.

Malherbe’s affidavit further says the central bank had reason to believe Kastelo’s clients were incentivised with bonuses to allow the use of their allowances and that they might not be aware that foreign bank accounts were opened in their names.

The Reserve Bank found that Kastelo’s portfolio had R891m in individual SDAs and R8.9bn in individual FIAs.

These funds are converted to foreign currency and invested offshore, particularly crypto arbitrage trading, the practice of buying a digital asset on one market or exchange at a lower price and quickly selling it on another for a higher price.

Malherbe considered the evidence of several whistleblowers and cross-border foreign exchange (CEF) results of Kastelo, covering the period from November 2021 to November 21 2025. According to Malherbe, the CEF disclosed a “reasonable suspicion of exchange control contraventions” to the tune of R4bn.

“The very business model is suspected of contravening the exchange control regulations. The dominant purpose of the business model is to circumvent the exchange control regulations by facilitating acquisition of foreign currency for Kastelo’s own benefit through the use of third parties without permission from the department,” Malherbe’s affidavit reads.

“Clients have no understanding of what is being done in their name through Kastelo. Most are not aware that they hold bank accounts abroad. Using a person’s SDAs and FIAs is not permissible.

“Kastelo relies on repatriation of the money as an argument. This displays a profound misconception as to the core purpose and objectives of exchange control regulations. The primary purpose is to protect the foreign currency reserves of the Republic. The business model depletes this, and it is irrelevant that there was an inflow in any form other than foreign currency. The risk to the fiscus is that foreign currency reserves of the republic will be depleted,” it says.

FIA allows tax-compliant South African resident adults to legally transfer up to R10m offshore per calendar year for global investments.