The Competition Commission has filed a new charge sheet with the Competition Tribunal involving 28 banks that are accused of manipulating the rand. This follows a Competition Appeal Court (CAC) ruling that sought details from the Commission about losses allegedly suffered by South African consumers and the economy from the alleged currency manipulation by both local and international banks.
The Commission has found in its investigation that the banks directly and indirectly manipulated trade of the US dollar in relation to Bids Offers. The commission says the banks also divided markets by allocating customers.
“Following its investigation, the Commission found that the banks directly and indirectly manipulated trade of the USD/ZAR currency pair in relation to bids, offers, bid-offer spreads, the Spot Exchange Rate and the terms and/or margin of executing client orders at the FIX. The banks have also divided markets by allocating customers in the USD/ZAR currency pair,” explains the Commission in a statement.
The commission has added Nedbank and RMB in the referral. The new referral follows the ruling by the CAC in February, which dismissed the banks’ appeal that sought to obtain an order dismissing the Commission’s case against them. The main contention of the banks on appeal was that the competition authorities of South Africa do not have jurisdiction over their activities as they took place outside of South Africa, in New York City in particular.
The CAC ordered, among other things, that the Commission file a new referral to replace all the previous ones, and that the new referral must demonstrate that the behaviour of the banks to manipulate the US dollar/rand currency pair had a direct and immediate effect on the South African consumers and the economy.
More banks implicated
The new referral provides more details on the operations of the currency manipulation cartel, its effects on South Africa, and expands the scope of the prosecution to include five more banks.
The new banks added are the Nedbank Group (constituted by Nedbank Limited and Nedbank Group Limited), Rand Merchant Bank (constituted by RMB Holdings Limited and FirstRand Bank Limited) and Standard Americas Inc.
“The banks must file their answers to these charges, which have now been further substantiated. Charges will not go away. Some of the individual traders involved in the currency manipulation have been dismissed, but their employers – the banks, are yet to be held accountable in South Africa. It is the responsibility of the South African authorities to get to the bottom of these serious allegations about the manipulation of our currency, wherever it occurred” says Competition Commissioner, Tembinkosi Bonakele.
Bonakele elaborates in the audio below: