The timing of the Competition Commission’s price-fixing case involving 17 banks seems suspicious, according to the Democratic Alliance.
The Commission on Wednesday referred a collusion case to the tribunal for prosecution against the banks, including three of South Africa’s big banks. “The DA takes note of the Competition Commission’s referral of the matter to the Tribunal and will wait for the law to take its course,” said DA MP and shadow minister of economic development Michael Cardo.
“But the timing of the announcement does seem a little suspicious, coming hot on the heels of [President Jacob] Zuma’s State of the Nation Address (SONA), in which he made it clear that the competition authorities would be used as one of the main tools of ‘radical economic transformation’ going forward,” he said.
When delivering his SONA, Zuma said one of the ways in which government will enforce broader economic participation is to draft new legislation to counter economic concentration. Zuma said a small grouping still controls most of the market. “During this year, the Department of Economic Development will bring legislation to Cabinet that will seek to amend the Competition Act to address the need to have a more inclusive economy and to de-concentrate the high levels of ownership and control we see in many sectors.”
He acknowledged that South Africa’s competition authorities have done excellent work to uncover cartels and punish them for breaking the law.
“Last year I signed into law a provision to criminalise cartels and collusion and it came into effect on 1 May. It carries jail sentences of up to ten years. We are now stepping up our actions to deal with the other challenges, namely economic concentration.
“In this way we seek to open up the economy to new players giving black South Africans opportunities and make it more dynamic, competitive and inclusive. This is our vision of radical economic transformation.” Last week Zuma also blamed South Africa’s top four banks for controlling the economy.
“If you have got four banks – major ones – and they take everything; they don’t want you to do anything,” he said on SABC’s Morning Live, which is sponsored by Gupta-owned newspaper, The New Age.
Zuma said banks often treated poor black people unfairly due to their lack of collateral. “The time has come: we should be able to deal with the economy at a fair level,” he said.
The top four banks are Absa, Standard Bank, FNB and Nedbank. The three banks mentioned in the latest collusion case are Investec, Standard Bank and Absa.
“There’s a clique in Cabinet that clearly wants to do battle with the banks – without any regard for economic fallout – and I hope this latest move doesn’t form part of that trend,” said Cardo.