ANC comes out swinging for harsh punishment for banks fingered in collusion

Feb 17, 2017, 00:29
ANC comes out swinging for harsh punishment for banks fingered in collusion

The Commission on Thursday afternoon said in a statement it would proceed to prosecute 17 worldwide banks it alleges were guilty of price fixing and market allocation in the trading of foreign currency pairs involving the rand.

The commission said that from at least 2007, banks had an agreement to collude on prices for bids, offers and bid-offer spreads for the spot trades in relation to currency trading involving the USA dollar and rand currency pairing. It could have had a potentially huge impact on the rand and the South African economy.

Among the local banks referred to the Competition Tribunal for prosecution are Investec, Standard Bank and Absa.

The Commission named lenders including Bank of America's Merrill Lynch unit, JPMorgan Chase & Co., BNP Paribas SA, Credit Suisse Group AG, HSBC Holdings Plc and Nomura Holdings Inc.

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The Commission is also seeking an order declaring that the banks are liable for the payment of an administrative penalty equal to 10% of their annual turnover.

Responding to the news, the ruling African National Congress said the alleged acts of corruption have crudely exposed what it called an ethical crisis in the South African banking sector. So it's possible that the banks could have colluded on the value. "Without a doubt, it further raises a question of the extent to which the currency was manipulated with politically motivated intentions", spokesperson Zizi Kodwa said.

Banks working with Commission ABSA said it will continue to co-operate with the Commission during the prosecution of this matter, adding that no fines were brought against the bank. "And the Competition Tribunal should be able to test the evidence and adjudicate accordingly, without fear, favour or prejudice, in terms of its mandate as an independent institution subject to the constitution and the law", he said. An opposition party in the ANC, the Economic Freedom Fighters, is calling for all banks involved to have their licences revoked. Zuma has suggested that Standard Bank, Barclays Africa Group Ltd., FirstRand Ltd. and Nedbank Group Ltd. may have colluded when they closed accounts operated by companies controlled by members of the Gupta family, who are his friends and are in business with his son.

"We believe collusion around South Africa's currency is treacherous and should be treated as such".