Forex probe may stem from whistle blower or ‘confession’

An investigation by South Africa’s anti- trust regulator into alleged foreign currency manipulation involving the rand may stem from a whistle blower or “a confession,” a central bank official said.

The Competition Commission informed the central bank of its investigations without sharing details of the probe, South African Reserve Bank Deputy Governor Kuben Naidoo told reporters Tuesday in Johannesburg.

“We have spoken with the banks and asked them to cooperate fully with the Competition Commission,” Naidoo said, as the central bank’s bank supervision department released its annual report for 2014.

The commission said on 19 May it’s investigating 11 entities, including local banks Standard Bank Group, Barclays Group Africa and Investec for alleged collusion in trades involving the rand. Finance Minister Nhlanhla Nene said May 22 he was “very concerned” by the allegations and wanted to understand the impact on the country’s financial system.

The Reserve Bank’s own review of foreign-exchange trading is underway “and we haven’t found anything untoward in South Africa,” Naidoo said.

The competition commission hasn’t spoken to the banks involved in the investigation, it said Monday.

‘Gathering Evidence’
“We don’t have to be in touch,” Mava Scott, a spokesperson for the commission, said by phone from Pretoria. “We are under no obligation. Right now we are gathering evidence. Once we come to the conclusion that someone has a case to answer and we have enough to prosecute, then we will go and speak with them.”

Given the high-profile nature of the investigation, the commission has committed to working on it as fast as possible, Scott said.

Spokespeople for Standard Bank, Investec and Barclays Africa have said their banks will cooperate fully with the investigation. BNP Paribas SA, Citigroup, Citigroup Global Markets, Barclays Bank, JP Morgan Chase & Co. and a unit of Standard Chartered were also named in the probe.

Naidoo said at Tuesday’s briefing he didn’t know if the rand exchange rate had been manipulated. A misdemeanor may have affected the currency’s price and it was essential that people in the market have the confidence that the market is fair, he said. The extent of any malpractice wasn’t yet clear, he said.

“My sense is that the investigation is as a result of a whistle blower or a confession,” Naidoo said.

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever. But it comes at a cost. Advertisers are cancelling campaigns, and our live events have come to an abrupt halt. Our income has been slashed.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years. We’ve survived thanks to the support of our readers, we will need you to help us get through this.

To help us ensure another 35 future years of fiercely independent journalism, please subscribe.


Reinstated Ingonyama Trust managers hit with retrenchment notices

The effect of Covid-19 and the land reform department’s freeze of R23-million because the ITB didn’t comply with budget submissions are cited as some of the reasons for the staff cuts

Battle over R6bn workers’ retirement fund

Allegations from both sides tumble out in court papers

Nigeria’s anti-corruption boss arrested for corruption

Ibrahim Magu’s arrest by the secret police was a surprise — but also not surprising

Eskom refers employees suspected of contracts graft for criminal investigations

The struggling power utility has updated Parliament on investigations into contracts where more than R4-billion was lost in overpayments

press releases

Loading latest Press Releases…

The best local and international journalism

handpicked and in your inbox every weekday