{"id":870532,"date":"2026-08-17T15:00:00","date_gmt":"2026-08-17T13:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=870532"},"modified":"2026-08-17T14:54:03","modified_gmt":"2026-08-17T12:54:03","slug":"serious-allegations-against-da-finance-chief-mark-burkes-company-over-r4-billion","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/870532\/serious-allegations-against-da-finance-chief-mark-burkes-company-over-r4-billion\/","title":{"rendered":"Serious allegations against DA finance chief Mark Burke’s company over R4 billion"},"content":{"rendered":"\n

The South African Reserve Bank (SARB) has accused fintech company Kastelo, co-founded and chaired by DA federal finance chairperson Mark Burke, of an alleged attempt to circumvent South Africa\u2019s exchange-control regulations.<\/p>\n\n\n\n

The allegations are contained in a High Court judgment regarding a dispute between Kastelo and the central bank over the freezing of the company’s funds held at Access Bank.<\/p>\n\n\n\n

The Gauteng Division of the High Court in Johannesburg dismissed Kastelo\u2019s application on 28 July 2026 and ordered the company to pay SARB\u2019s legal costs on an attorney-and-client scale, including the costs of two counsel.<\/p>\n\n\n\n

Burke co-founded Cape Town-based Kastelo in 2018, with the company formally registered in South Africa as Kastelo (Proprietary) Limited in 2020.<\/p>\n\n\n\n

Parliamentary disclosures show that he has business interests and directorships in entities within the Kastelo network, including Kastelo, Kastelo Global, and Kastelo Arg.<\/p>\n\n\n\n

Burke serves as chairman, while day-to-day management is handled by executive leadership, including his brother, CEO Nicholas Burke.<\/p>\n\n\n\n

The SARB investigation was conducted by its Financial Surveillance Department and was prompted by concerns raised by Kastelo\u2019s own bank.<\/p>\n\n\n\n

\u201cThe applicants’ own authorised dealer, Access Bank, triggered the investigation when it reported suspicious transactions and conducted its own forensic review,\u201d the court said. <\/p>\n\n\n\n

Access Bank reported the transactions to SARB after considering whether to end its relationship with Kastelo, but \u201cdid not want to pass what it considered contraventions of the regulations to another Bank\u201d.<\/p>\n\n\n\n

The investigation considered evidence from witnesses and whistleblowers, as well as cross-border foreign exchange transaction results involving Kastelo between November 2021 and November 2025.<\/p>\n\n\n\n

It also examined transactions conducted between August and November 2025. On 24 November 2025, SARB issued a blocking order preventing withdrawals from Kastelo\u2019s Access Bank account<\/strong><\/a>.\u00a0<\/p>\n\n\n\n

The investigation identified what SARB described as a \u201creasonable suspicion of exchange control contraventions in the amount of at least R4 billion\u201d. <\/p>\n\n\n\n

Kastelo has defended its business model<\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

The court stressed that SARB was not required to prove a contravention before issuing the blocking order.<\/p>\n\n\n\n

The legal threshold was a \u201creasonable suspicion\u201d, which the judgment described as \u201ca relatively low, objective threshold assessed on the totality of the available information\u201d.<\/p>\n\n\n\n

At the centre of the allegations was Kastelo\u2019s use of South Africans\u2019 foreign exchange allowances. <\/p>\n\n\n\n

Individuals are generally permitted a Single Discretionary Allowance of R1 million and a Foreign Investment Allowance of R10 million, subject to applicable rules and requirements.<\/p>\n\n\n\n

SARB alleged that \u201cthe dominant purpose of the business model is to circumvent the Exchange Control Regulations by facilitating acquisition of foreign currency for the applicant\u2019s own benefit through the use of third parties without permission from the department\u201d.<\/p>\n\n\n\n

The regulator further alleged that Kastelo offered bonuses to individuals to use their allowances to purchase foreign currency and acquire crypto assets abroad.<\/p>\n\n\n\n

It claimed that some clients did not understand that offshore accounts were being opened or how their allowances were being used.<\/p>\n\n\n\n

SARB also suspected that Kastelo provided loans to clients to enable them to use their allowances, describing these as \u201ca simulated transaction designed to circumvent exchange controls\u201d<\/p>\n\n\n\n

Access Bank\u2019s investigation reportedly found instances where clients earning about R15,000 a month received loans of approximately R249,000.<\/p>\n\n\n\n

Another concern was the potential effect on South Africa\u2019s foreign currency reserves. <\/p>\n\n\n\n

SARB argued that even if funds were subsequently repatriated, the transactions could undermine the purpose of exchange controls because the model \u201cdepletes this\u201d pool of foreign currency reserves.<\/p>\n\n\n\n

The central bank also alleged that Kastelo breached rules applicable to Treasury Outsourcing Companies, including by buying and selling foreign currency for its own account, acting as a principal rather than an intermediary and conducting transactions without clients\u2019 knowledge or participation.<\/p>\n\n\n\n

The court ultimately found that SARB had sufficient grounds for the blocking order. <\/p>\n\n\n\n

\u201cIn the circumstances, I find that the available evidence was holistically and objectively viewed by Malherbe before reaching a decision that there were reasonable grounds to suspect that Kastelo had contravened the Regulations and I accept his version,\u201d the judgment stated.<\/p>\n\n\n\n

The court also rejected Kastelo\u2019s argument that it should have been given an opportunity to make representations before the funds were blocked.<\/p>\n\n\n\n

The court found that \u201cMalherbe was not obliged to afford Kastelo audi alteram partem prior to issuing the blocking order, and neither was Kastelo entitled to it\u201d.<\/p>\n\n\n\n

The court also found that there were no genuine disputes of fact requiring the matter to proceed to trial.<\/p>\n\n\n\n

Kastelo has defended its business model, saying it allows clients to benefit from price differences between domestic and international cryptocurrency markets.<\/p>\n\n\n\n

Speaking to Business Day<\/a>, it denied keeping clients unaware of offshore accounts, and added that it no longer offered the arbitrage service following SARB\u2019s blocking order. <\/p>\n\n\n\n

It echoed previous explanations, given to MyBroadband,<\/strong><\/a> when the blocking order was first executed.<\/p>\n\n\n\n

In response to questions, the SARB said it has submitted an affidavit in relation to the matter, which is now before the court, and would not be commenting further.<\/p>\n\n\n\n

The full High Court judgement can be viewed below.<\/p>\n\n\n\n