- The Labour Court upheld the dismissal of Standard Bank's senior forensic investigator, Mercy Zihove, after romance scam proceeds passed through her business account.
- The court found no evidence that Zihove knowingly took part in the fraud, but ruled that she failed to show the level of diligence expected from a certified fraud examiner.
- Although Standard Bank acted unfairly by overturning the initial not guilty finding, the court found the dismissal itself was fair and justified
A Standard Bank customer, thinking she was in a romantic relationship with someone online, unknowingly triggered an investigation that ultimately led to one of the bank’s own senior forensic investigators losing her job.
The Labour Court in Johannesburg dismissed Mercy Zihove’s application to review and overturn a CCMA arbitration award that upheld her dismissal from Standard Bank South Africa. Acting Judge GC Phakedi found that, while the bank’s disciplinary process was unfair, there was a fair reason to dismiss Zihove because she did not exercise the vigilance expected of a certified fraud examiner.
Customer follows instructions from online lover
The matter began in January 2023, when Nedbank alerted Standard Bank to a suspicious transaction involving one of its customers, ED Strydom, and warned that a payment of R100,000 might be linked to fraud.
Standard Bank found that on 4 January 2023, Strydom made three transfers of R100,000. One payment went into the account of Mike Angies Workshop (Pty) Ltd, a business owned by Zihove. Soon after, R80,000 was moved from that account into another Standard Bank account, and R10,000 went into a First National Bank account belonging to Elite Ambitions.
When investigators spoke to Strydom, she explained that she had been in a romantic relationship with a man who gave her the bank account numbers for the deposits. Standard Bank concluded that Strydom was the victim of a romance scam and advised her to open a criminal case with the police. Investigators then focused on Zihove because one of the transfers went into her business account.
Investigator believed money was for buying a vehicle
At the time, Zihove was a senior forensic investigator in Standard Bank’s Group Forensic Services and a certified fraud examiner with over ten years of experience.
She said the money was meant to buy a vehicle for a client in Dubai. Her workshop manager, Kuda Govo, told her that his brother wanted to buy a vehicle in South Africa and asked if the money could be paid into the workshop’s account. Zihove accepted the explanation and transferred the money without checking its source.
After her business account was frozen, Zihove asked Govo to create a WhatsApp group with a man named Marvin so she could ask him about the source of the money. Marvin could not answer several of her questions. During cross-examination, Govo admitted that Marvin was “a scam artist” and agreed that if Zihove had asked those questions before transferring the money, “she would have realised it was a scam.”
No evidence she was involved in the fraud
Standard Bank charged Zihove with misconduct, saying she allowed her business account to receive proceeds of financial crime and transferred the money without due diligence, putting the bank’s reputation and finances at risk.
However, during the arbitration and review, both sides agreed there was no evidence that she knowingly took part in the romance scam. Their signed pre-arbitration minute stated that “there is no evidence that the Applicant was complicit in the fraud scam” or was aware of it.
Still, the bank insisted that someone with Zihove’s qualifications should have spotted the warning signs, checked the source of the money, and refused to transfer it.
Bank changes disciplinary outcome
An independent disciplinary chairperson initially found Zihove not guilty. Before that outcome was communicated to her, senior managers challenged it, and the chairperson later changed the finding to guilty, leading to her dismissal on 14 April 2023.
The Commission for Conciliation, Mediation and Arbitration (CCMA), through Commissioner T Serero, later found that while Standard Bank’s disciplinary process was unfair because it interfered with the chairperson’s decision, the dismissal itself was fair. Zihove was awarded three months’ salary as compensation.
Labour Court finds dismissal justified
In the Labour Court, Zihove argued that Standard Bank’s interference with the disciplinary outcome made her dismissal both procedurally and substantively unfair.
Judge Phakedi agreed that the bank acted outside its own disciplinary code by influencing the outcome and that the commissioner was right to find the process procedurally unfair. However, the judge said the commissioner still had to decide whether there was a fair reason for dismissal based on all the evidence from arbitration.
The judge found that although Zihove was not involved in the romance scam, she “allowed her bank account held with her employer to be used as a vehicle to commit fraud against a client of the bank.”
Judge Phakedi added that, as “a senior investigator who was a certified fraud examiner,” Zihove “ought to have exercised some caution” before transferring the money. The court said Standard Bank relies on employees in such positions “to ensure that its clients’ money is safeguarded and that internal controls are strong enough to inspire confidence in new clients and business partners.”
The Labour Court found the commissioner’s decision reasonable, dismissed the review application, and made no order as to costs.
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