The South African Reserve Bank has seized nearly R100 million from Rappa Resources, an entity linked to the so-called “gold mafia,” after the company violated the country’s exchange control regulations. This move adds to the company’s ongoing difficulties, as it has increasingly become unbankable within the country.
The Reserve Bank confiscated R94.5 million of Rappa’s funds held at Access Bank SA, with the amount forfeited to the state. This seizure comes as local banks have begun to distance themselves from the group due to reputational risks. Reports indicate that Capitec, which aims to expand its business banking division, halted Rappa Resources’ ability to transfer foreign currency after media coverage raised concerns over the company’s questionable business practices.
Rappa Resources is involved in processing mining residues and waste materials to extract precious metals, primarily gold and silver, which it then exports in the form of gold-bearing bars. The company, along with others, faces accusations of depriving the state of billions of rand by introducing untaxed gold into the market and falsifying VAT payments for this bullion.
In May 2024, Rappa opened a business account with Capitec. However, this relationship ended abruptly when the bank informed Rappa that it was conducting a review of the firm’s business activities. Capitec stated that pending the outcome of this review, it would not process any further foreign currency transactions for Rappa.
The bank expressed that it had noticed adverse media reports about Rappa, which, while not confirming their accuracy, were sufficient for Capitec to reconsider the risk of maintaining a banking relationship with the company.
In addition to these complications, the South African Revenue Service (SARS) has secured a court order requiring Rappa to provide documentation needed to substantiate a tax liability exceeding R4 billion, implicating numerous industry players. This information includes records related to the company’s suppliers and bank statements.
Rappa’s situation worsened in March when Bidvest Bank also decided to terminate several accounts held by the company, citing concerns about its transactional behaviour. Attempts by Rappa to transfer its banking needs to Bank Zero were similarly rebuffed, as the bank flagged the company in its review process.