Judgment has been reserved in decade-long battle to prosecute local and international banks accused of manipulating the rand
The Constitutional Court has reserved judgment on the Competition Commission’s decade-long battle to prosecute local and international banks accused of manipulating the rand.
In what was supposed to be a sitting for four days, the Apex Court wrapped up intense hearings a day earlier on Thursday in a matter that could redefine the boundaries of South African competition law.
Case
The case dates back to 2017, when the commission referred a complaint against 28 local and international banks to the Competition Tribunal.
The complaint alleged that, between 2007 and 2013, banks manipulated the foreign exchange rate between the US dollar and the rand by sharing sensitive information through messaging platforms.
Two banks – Citibank and Standard Chartered – have already admitted their involvement, paying fines in 2017 and 2023, respectively.
ALSO READ: Standard Chartered admits it manipulated the rand, agrees to R42 million fine
Thirteen banks remain in the appeal case, including JPMorgan Chase Bank, HSBC Bank, FirstRand Bank, Nedbank, Standard Bank, and Bank of America.
‘Quintessential transnational cartel’
Arguing before the court, the commission’s advocate, Tembeka Ngcukaitobi, argued that the matter was a “quintessential transnational cartel” with real consequences for the South African economy.
“They targeted our sovereignty – our rand – driven by profit. We are the only ones who have an interest in prosecuting them.”
Traders
Ngcukaitobi argued that the traders implicated in manipulating the rand-dollar exchange rate knew the consequences of their actions, saying that foreign banks should not escape scrutiny or jurisdictional grounds.
He argued that the allegations went to the heart of the traders’ awareness and intent.
“The traders were aware of this when they engaged in the collusive conduct and posted quotes or, in some cases, withheld quotes on international trading platforms with the aim of manipulating the rand and dollar exchange rate and moving the market in a desired outcome.”
READ MORE: How the rand was fiddled
‘Commission failed’
Senior counsels representing the banks argued that the commission had failed to prove an overarching conspiracy, saying that mere participation in a Bloomberg chatroom does not amount to proof of collusion, and that the regulator has not demonstrated intent or prior knowledge of manipulation.
Banks will walk
Owen Nkomo, analyst at Inkuzi Wealth Group, lamented the complexity of the case, saying the banks may walk.
I think that the banks are going to walk. It’s a complicated case. It’s very technical as well. Trading itself is a very technical issue, and I believe that the people who are assessing in this case don’t have enough experience, in my humble view, to make definitive decisions about the evidence that they have,” he told the SABC.
Judgment has been reserved.
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