A Barclays Plc bank branch in Chadwell Heath
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.