The National Consumer Tribunal (NCT) ruled on Wednesday afternoon that Shoprite Holdings was guilty of reckless lending. It would be fined R1million, the National Credit Regulator has also said.
"This judgment comes after an investigation by the National Credit Regulator (NCR) revealed Shoprite entered into credit agreements with consumers without conducting a reasonable and objective assessment of the consumers' ability to afford the loans," said NCR CEO, Nomsa Motshegare.
"Some of the conduct of Shoprite that was found to be in contravention of the National Credit Act (NCA) was that Shoprite, when assessing whether a consumer could afford a loan or not, took into account unverified income of another person, such as a spouse or a life partner," she said in a statement.
Shoprite Holdings has also been instructed to, above the R1 million fine, appoint a debt counsellor at its own costs, in order to assess if the consumers that were mentioned in the referral are over-indebted.
The news comes one day after Shoprite's shareholders approved a buyback of former chief executive Whitey Basson's shares for 1.75 billion rand ($136 million), Reuters reported.Suggest a correction