ANALYSIS: Ten questions DA finance boss Mark Burke must answer from Sarb’s R4bn probe ruling

A July court judgment raises many questions for the DA MP Mark Burke and his family-owned company Kastelo, even though he stepped away from day-to-day management when he became a full-time political leader in 2024.

A critical court judgment delivered on 28 July sets out the questions facing DA MP and party head of finance Dr Mark Burke. He has stepped aside from three financial oversight and appropriation committee roles at Parliament this week pending the finalisation of a central bank investigation which could take two-and-a-half more years to complete.

The judgment found that the SA Reserve Bank’s (Sarb’s) investigation into Kastelo and its decision to freeze a bank account is legal. It did make a finding on whether the company committed any wrongdoing. An earlier judgment in January denied the company an application for an urgent interdict because of the impact of the Sarb action on its reputation and fortunes.

The July ruling reveals that the company’s own bank triggered the investigation: “The applicant’s own authorised dealer, Access Bank, triggered the investigation, when it reported suspicious transactions and conducted its own forensic review.”

The judgment records Sarb’s case that Access Bank “raised serious concerns regarding Kastelo’s business model” and was considering off-boarding Kastelo. The reason given for not off-boarding it was that the bank did not want to pass what it considered contraventions of the regulations to another bank; it therefore informed FinSurv (the Sarb’s financial surveillance division).

Individuals and whistleblowers also reported it for alleged transgressions and problems in its business model.

Burke, with his brother Nicholas Burke, founded the fintech Kastelo Pty Ltd in 2018 and did a roaring trade helping people use their single discretionary forex allowance (SDA) and foreign investment allowances (FIA) to trade crypto. When their clients could not afford it, they loaned them the money and paid them small allowances on the benefits.

On Kastelo’s own numbers, 891 clients potentially represented R891-million in SDAs and R8.9-billion in FIAs in an annual cycle.

For people earning an average R15,000 a month and facing the difficulties of lower middle-class life, signing up was a no-brainer. Kastelo rode high, as the numbers reveal.

Sarb is considering how to phase out foreign exchange control, an anachronism in modern markets. It dates back to the Great Depression when apartheid South Africa had to protect its foreign reserves.

Until the rules are scrapped, it remains law, and the Burkes’ company allegedly fell foul of regulations, Sarb contended.