S.African banks should be punished if currency rigging charges true - Treasury

The commission on Wednesday revealed that the banks were alleged to have colluded on price fixing and market allocation in the trading of foreign currency involving the rand/dollar currency pair from 2007.

The commission said it found that from at least 2007, the respondents had a general agreement to collude on prices for bids, offers and bid-offer spreads for the spot trades in relation to currency trading involving USA dollar / rand currency pair.

The banks stand accused of illegally influencing competition in the Dollar/Rand foreign exchange market.

The Commission said it has now referred the case to tribunal for prosecution. Others are Standard Bank of South Africa Ltd, Commerzbank AG; Australia and New Zealand Banking Group Limited, Nomura International Plc., Macquarie Bank Limited, ABSA Bank Limited (ABSA), Barclays Capital Inc and Barclays Bank plc.

As South Africans worriedly watched the rand rise and dip against the dollar, more than a dozen banks were illegally profiting from the volatility, according to local antitrust agency, Competition Commission. ABSA is one of 17 banks accused by the country's competition watchdog of conspiring to fix the rate of the South African currency. It is further an indication of how the markets are and can be manipulated by dominant oligopolies to cripple its functioning to suit their nefarious agendas.

The ANC said it will closely follow the developments in this case and calls for the Competition Tribunal to level against the banks the harshest possible sanction where they are found guilty.

Roodt says in these cases it can be hard to prove if any collusion has taken place.

South Africa's central bank said it viewed the allegations as a serious matter and would allow proceedings to run their course.

The left-wing opposition Economic Freedom Fighters said the banks involved should have their trading licenses revoked. EFF spokesperson Mbuyiseni Ndlozi said they will write to the South African Reserve Bank to demand that the banking and operating licences of the banks be discontinued immediately. 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.

Financial Times reported that global banks have now paid more than $10bn in relation to the forex scandal, exceeding the $9bn paid by a larger group of institutions to settle the Libor rigging claims.

  • Todd Kelly