The Competition Commission has welcomed the decision of the Competition Tribunal in which it dismissed applications or objections brought by various local and foreign banks to escape prosecution on currency manipulation allegations.
The tribunal ruled in the commission’s favour to add nine other banks in the complaint referral of the “Forex Cartel” case, bringing the number of banks facing prosecution of collusion to manipulate the rand:dollar exchange rate to a total of 28 foreign and local banks.
The tribunal also dismissed all the various applications or objections brought by 15 banks, including Standard Bank, Nedbank and FirstRand Bank to stop prosecutions against them for allegedly fixing the rand:dollar currency pair.
The tribunal further ruled that it had jurisdiction to hear the case against the banks.
The commission said this ruling was the second major setback for the banks in about a week, after the Competition Appeal Court (CAC) ruled in favour of the commission by denying Standard Bank access to the commission’s evidence.
The CAC ruled that Standard Bank could have access to the commission’s evidence only after it had answered to the allegations against it.
In the judgment handed down on March 30, the tribunal dismissed a second round of exception, objection, dismissal and strike-out applications brought by the various banks in response to the commission’s amended complaint referral.
As part of its reasons for the decision, the tribunal stated: “The respondents are accused of engaging in conduct considered the most egregious in competition law. Furthermore, the alleged conduct relates to fixing and manipulating the rand:dollar exchange rate, which has a central and crucial role in the South African economy.”
The tribunal ordered that all the banks must respond to the complaint referral by filing answering affidavits (in the main matter dealing with the merits of the case) within 40 business days of the tribunal’s order.
The tribunal further ordered that, if any of the banks still had an objection to the complaint referral, they should raise those objections as part of their answer to the complaint referral and, if the commission wished to reply, it must do so within 20 business days of the banks filing their answering affidavits.
“The decision by the tribunal affirms the commission’s view that there is collusion that the banks must answer to. The prosecution of this matter has been going on since 2017 and the banks have not answered to the allegations against them. This decision provides the banks with an opportunity to do so,” says Competition Commissioner Doris Tshepe.
The tribunal’s order can be accessed on its website at https://www.comptrib.co.za/open-file?FileId=53283.