Forex hearings: Competition Commission accused of being ‘vexatious and unreasonable’

The first leg of the Competition Tribunal’s hearings into allegations of foreign exchange collusion by 23 local and international banks began on Monday in a packed courtroom in Pretoria.

After numerous pre-hearings, the matter is finally being heard, well over a year after the Competition Commission referred the case to the tribunal.

The commission’s handling of the case has frustrated the banks so much that at least one — Investec — has applied for a declaratory order from the tribunal to declare the commission’s conduct “vexatious and unreasonable”.

READ MORE: Banks bust: ‘Price-rigging’ fine would be enough to wipe out SA’s budget deficit

The first tranche of proceedings has been devoted to addressing issues raised in the raft of exception applications brought by most of the banks shortly after the commission referred them to the Tribunal in February last year.

The commission has accused the banks of price-fixing and market allocation in the trading of foreign currency pairs involving the Rand. A settlement of R69.5-million has already been reached with Citibank, while ABSA, and its former parent Barclays, as well as Barclays Capital, have applied for leniency in the case.

READ MORE: Banks seek settlement — and also challenge collusion claims

In the exception applications, a number of the banks have asked the tribunal to dismiss the referral for a range of reasons, including that the commission’s case was vague and embarrassing, and that the tribunal has no jurisdiction over certain of the foreign banking entities.

The banks’ lawyers came out sabres at the ready, arguing among other things, that the commission’s case has not been made with enough facts to show an agreement between the banks, or a concerted practice, to collude.

Since many of the banks’ exception applications canvassed similar issues, the Tribunal divided this round of hearings into themes, for which one of the various advocates representing the banks was elected as lead counsel.

Advocate Wim Trengove argued under the theme of general pleading and exceptions, that allegations such as those relating to ongoing price fixing were made “with a complete lack of granularity” without which the banks cannot know what case they must answer.

“Vexatious and unreasonable”

After the initial referral, the commission has made a number of subsequent supplementing affidavits to rectify the parties listed in the matter, as well as provide further information and expand on its arguments. In January this year, the commission applied to join a further four additional banks to the complaint bringing the number of banks listed to 23.

The commission’s handling of the case was also called into question on Monday, with Investec asking the Tribunal to grant a declaratory order stating that the commission’s prosecution of the referral has been “vexatious and unreasonable”.

In court papers Investec’s Advocate Kate Hofmeyr accused the commission of adopting “unreasonable positions on various issues, only to backtrack on them later,” adding that it had caused the banks’ “significant prejudice during the course of its erratic behaviour”.

“The respondents have been forced to incur substantial unnecessary costs in preparing for hearings that they cannot proceed because of some further inexplicable step from the Commission.”

Hofmeyr told the tribunal on Monday that, “The conduct over the last year and a half, of the commission, displays a callous disregard for the banks.”

Investec is seeking the order because it is likely to have a “disciplining effect”, in the same way, that a costs order in other South African courts does.

Although in the Tribunal no costs order can be made against the Commission, Hofmeyr argued that the declaratory would serve a similar purpose.

The Competition Commission has not responded to the application for the declaratory order — but is expected to respond to this and the banks’ other arguments in the coming days.

The hearings continue to the end of Friday.

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

We must keep Covid-19’s gains in education

COMMENT: The disaster regulations mandated zero-rating for some websites. Now it is time to expand this access

‘Myeni obstructed the work of the Zondo commission’ — Hofmeyer

Advocate Kate Hofmeyr submitted that deputy chief justice Raymond Zondo should direct the secretary of the commission to lay a charge against Dudi Myeni for revealing the identity of secret witness ‘Mr X’

Myeni chooses silence on SAA capture

The former SAA board chairperson invoked the privilege not to incriminate herself at the Zondo commission

Zano Spark’s R4.3-million ‘kickback’ used to buy property

Former SAA Technical board chair Yakhe Kwinana’s foreign-exchange trading business came under scrutiny at the Zondo commission on Tuesday

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

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

Subscribers only

FNB dragged into bribery claims

Allegations of bribery against the bank’s chief executive, Jacques Celliers, thrown up in a separate court case

Dozens of birds and bats perish in extreme heat in...

In a single day, temperatures in northern KwaZulu-Natal climbed to a lethal 45°C, causing a mass die-off of birds and bats

More top stories

Carlos on Oozymandias’ goodbye grift

"Look on my works ye Mighty, and gimme 50 bucks!"

This is how the SIU catches crooks

Athandiwe Saba talked to the Special Investigating Unit’s Andy Mothibi about its caseload, including 1 000 Covid contracts

Richard Calland: Not much has shuffled in the political pack

Stocktake at the end of a momentous year shows that the ruling party holds all the cards but has little room for manoeuvre

Tighter Covid restrictions for N. Mandela Bay — other hotspots...

With the number of cases spiralling out of control in hotspots in the Eastern Cape and Western Cape, longer curfews and restrictions on alcohol sales are being implemented

press releases

Loading latest Press Releases…