Banks were colluding to get rand-fixing charges dropped: Competition Commission

The Competition Commission has accused the banks named in a rand price-fixing investigation of trying to collude on their defence against the allegations – and of trying to get off on technicalities.

At least a dozen local and international banks were identified by the Commission in February 2017, after an investigation from mid-2015 found that traders had colluded in fixing the price of the rand.

It was alleged that currency traders had been buying and selling US dollars in exchange for the rand at fixed prices. This was accomplished by making false sales to drive up demand, or colluding to agree not to trade for specified periods of time.

Speaking to Radio 702, Sipho Ngwema, head of communications at the Competition Commission, said that only one bank – Citibank – has settled with the group, with all the other banks trying to get off the process by highlighting ‘legal technicalities’.

“Part of the problem is that they also want to collude in the process of challenging us. Fortunately this has been sorted out by the (Competition) Tribunal on Monday. We are going to hear the technical legal issues they are raising, one by one,” he said.

The biggest frustration the Commission has faced between February and now is the fact that none of the other banks have formally answered to the allegations against them, Ngwema said.

“Rather, they have decided to raise technical issues like ‘jurisdiction’ and others,” he said, adding that the banks have also been looking to settle with the Commission at the same time.

This week, the Competition Commission said it would no longer entertain these settlement talks, with Ngwema saying that the group wants to now focus on the litigation.

“(The banks) are trying to get off on technicalities; they’re trying to collude on their defence. Luckily we have passed that hurdle and they must now talk to us one-on-one, or deal with the Tribunal,” Ngwema said.

Among the named banks, Absa, Standard Bank and Investec emerged as the South African banks that were part of the collusion.

Absa was granted conditional immunity in the matter, for being the first to come forward and cooperate fully with the investigations. Standard Bank, meanwhile, declared that its internal investigations had not revealed any wrongdoing.

Citibank paid a R70 million penalty, which is significantly less than the full punishment of a 10% penalty fine of annual turnover. However, lawyers for Bank of America Merrill Lynch called for the whole probe to be dropped, saying the investigation was “vague” and embarrassing for the Commission.

Read: No more settlements for banks caught up in rand price-fixing scandal

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Banks were colluding to get rand-fixing charges dropped: Competition Commission