FNB's kiss for my silence

Rabbi breaks silence secured by FNB with an R800,000 incentive.

One of the country’s best known rabbis has broken a 16-year silence to reveal to Noseweek an extraordinary deal in which he agreed not to “go public” with the revelation that his FNB safety deposit box had been plundered by a bank employee.

In return for Rabbi Hirsch Rosenblum’s silence, First National Bank would not press him to pay its legal costs totalling around R800,000. The inducement, which many might consider a form of extortion, was made by FNB after the bank won a Supreme Court of Appeal test case against the rabbi in 2001. Judge RM Marais ordered Rosenblum to pay all FNB’s legal costs, which included two counsel at the appeal, and all the bank’s earlier high court costs.

Rabbi Hirsch Rosenblum

“But I didn’t have to pay them,” says Rosenblum now. “FNB said if I wouldn’t go public, they would make a deal that I don’t pay their costs. If I kept quiet.”

“We had a Krugerrand bracelet and necklaces. There were heirlooms from my wife’s family that go back 200 years: blue and white diamond earrings. I had a IWC Schaffhausen gold watch and rabbinic papers that are totally irreplaceable.”

Rabbi Rosenblum, a 74-year-old native New Yorker from Brooklyn, was spiritual leader of the Emmarentia Shul in Joburg for 37 years. He retired at the beginning of 2016.

Rosenblum and his wife Jeanette had earlier won a high court judgment against FNB for damages after valuables worth R1 million were stolen from their FNB deposit box at the bank’s Auckland Park branch. But two years later Judge RM Marais upheld the bank’s appeal in Bloemfontein, finding in an important test case that the bank’s contract expressly excluded liability. He ordered the Rosenblums to pay FNB’s costs for both hearings.

The appeal court ruling has become a much-quoted precedent used by the banks to defend claims by their customers. But although the Marais judgment is widely available, conveniently for the bank it does not go into the detail of the case – including the fact that the theft was an inside job.

That embarrassing fact was not reported in the media following the rabbi’s initial high court victory either, and Rosenblum had no wish to advertise his foray into litigation against the bank. But when triumph turned to expensive tragedy in Bloemfontein, he was hopping mad.

Rosenblum says that his money-for-silence deal with FNB was handled by his advocate, Philip Wulfsohn SC. There was nothing in writing.

Wulfsohn, now 95 and long retired, was unable to confirm the arrangement for Noseweek. His daughter explains: “Unfortunately it won’t be possible. He’s not well physically and also he’s losing his memory.”

So why was FNB so anxious to gag the rabbi? Presumably they wanted to preserve a crystal clear judgment by three eminent judges of the Supreme Court of Appeal – Marais sat with Judges Navsa and Chetty – uncontaminated by revelations from the rabbi that his deposit box had been emptied by one of their own employees.

The Rosenblums did not press criminal charges. “I didn’t have the time for endless court appearances,” says the rabbi. “The manager called me. He said the box was not there. It had been stolen by someone who worked at the bank. I never got the stuff back, that’s the bottom line.”

Rabbi Rosenblum’s extraordinary story comes as FNB pulls out of the safety deposit business after recent safety deposit box heists at three of its branches – two of them with “inside” assistance. In the biggest, at Randburg last December, thieves made off with 360 boxes. So far, 200 box holders from that heist have come forward claiming total losses of R230m. FNB chief executive Jacques Celliers has promised to make settlement offers at the end of June.

Previous deposit-box thefts like Rabbi Rosenblum’s were treated by the courts under common law, which traditionally supported banks’ draconian exclusion clauses when it came to negligence and even dishonest actions by employees. The Consumer Protection Act that came into effect in 2011, however, blows this protection away and the first test case is eagerly awaited.

Lee-Anne van Zyl, CEO, FNB Points of Presence [Dictionary: A point of presence is an artificial demarcation point or an interface point], tells us: “The settlement discussions between FNB and its customers are confidential. The decision to discontinue safe custody storage is part of the bank’s regular review of service offerings and the product’s sustainability.”

Asked to comment on the R800,000 inducement to Rabbi Rosenblum, Van Zyl says: “The Rosenblum matter was resolved by the Supreme Court of Appeal in 2001 and as such is closed.”

Safety Deposit Boxes
Consumer Protection Act
exclusion clauses
South Africa
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