Banks seek settlement — and also challenge collusion claims

Despite an apparent fight-back by several banks named in the Competition Commission’s foreign exchange collusion case, some of them have also initiated settlement discussions, a spokesperson for the commission said on Thursday.

On Wednesday, 14 banks filed exception applications with the Competition Tribunal, arguing that the charges brought by the commission were “vague and embarrassing”.

They said that unless material evidence was provided, the charges against them should be dismissed.

Some major international banks named also argued that the commission does not have jurisdiction over them.

The commission’s spokesperson, Sipho Ngwema, said a number of the banks who have submitted exceptions have initiated settlement discussions. He could not say how many.


Earlier this year, the commission brought a case against 17 major local and international financial institutions for collusion in the foreign currency markets.

The banks include Barclays’s local arm, Absa, Standard Bank and Investec, as well as the international banks JP Morgan Chase, BNP Paribas and Standard Chartered.

Absa has been granted leniency and is co-operating with the investigation and Citibank has agreed to pay a fine of slightly less than R70-million.

The case is taking place against a backdrop of growing mistrust between business and the government since President Jacob Zuma reshuffled his Cabinet and replaced the respected finance minister, Pravin Gordhan.

The country’s banking sector in particular has come under fire for failing to transform and, after the local big four banks closed the accounts of the controversial Gupta family, known associates of Zuma, they have also been at the forefront of battles over state capture.

There is growing concern in the competition law fraternity that the commission is under political pressure to go after private firms, including banks.

But Ngwema denied it and said it is “false to claim that this had anything to do with local politics”. He said the case was the result of an international investigation and had been going on for some time.

The commission has filed a supplementary affidavit to the tribunal arguing it does have jurisdiction over cartel conduct that affects the value of the rand, wherever it takes place.

In its papers, and echoing other banks in the case, Investec requested that the commission provide the material facts on which allegations of price fixing and agreements to co-ordinate trading, among other allegations, are based. The commission’s referral was “vague and embarrassing”, it said.

But Ngwema said the banks’ claims were based on technicalities. He described their actions as a “fishing” expedition.

He said the banks had not responded to the merits of the commission’s case, which the commission believed were solid.

Subscribe to the M&G

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.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

Lynley Donnelly
Lynley Donnelly
Lynley is a senior business reporter at the Mail & Guardian. But she has covered everything from social justice to general news to parliament - with the occasional segue into fashion and arts. She keeps coming to work because she loves stories, especially the kind that help people make sense of their world.

Related stories

Too broke for Mboweni to budget

The scramble to find cash for an SAA bailout, Covid-19 grants and civil servants’ demands force postponement of mini-budget

Justice department hit by a costly cyberattack

The theft of R10-million from the Guardian’s Fund account prompts the justice department to freeze all accounts until an audit can determine the extent of the damage

Debt rises as virus eats paycheques

Heavily indebted, South Africans turn to loan sharks rather than banks for short-term relief, while business resists borrowing from banks due to economic uncertainty

Unethical businesses will face people’s protest

Companies must behave like model democratic citizens if they are to earn and retain society’s social licence to operate

Controls on remittances risk driving financial flows to Somalia underground

The regulations aim to prevent money laundering and financing terror organisations, but implementing them is proving to be difficult

The demise of the chequebook

The use of cheques has fallen about 80% in the past decade as consumer habits shift and digital payments continue to gain traction
Advertising

Subscribers only

Covid-19 surges in the Eastern Cape

With people queuing for services, no water, lax enforcement of mask rules and plenty of partying, the virus is flourishing once again, and a quarter of the growth is in the Eastern Cape

Ace prepares ANC branches for battle

ANC secretary general Ace Magashule is ignoring party policy on corruption-charged officials and taking his battle to branch level, where his ‘slate capture’ strategy is expected to leave Ramaphosa on the ropes

More top stories

Journey through anxious Joburg

A new book has collected writing about the condition of living, yes, with a high crime rate, but also other, more pervasive existential urban stresses particular to the Global South

Football legend Maradona dies

The Argentinian icon died at his home on Wednesday, two weeks after having surgery on a blood clot in his brain

Why no vaccine at all is better than a botched...

As Covid vaccines near the manufacturing stage, a look at two polio vaccines provides valuable historical insights

Under cover of Covid, Uganda targets LGBTQ+ shelter

Pandemic rules were used to justify a violent raid on a homeless shelter in Uganda, but a group of victims is pursuing a criminal case against the perpetrators
Advertising

press releases

Loading latest Press Releases…