By Lehlohonolo Lehana.
South African banks, Nedbank and Standard Bank are accusing the Competition Commission of ignoring facts and submitting evidence that is insufficient in the ongoing case of alleged rand manipulation and price-fixing.
Advocate Anthony Gotz SC, told the Constitutional Court on Wednesday that Nedbank should never have been added as a respondent in the Competition Commission’s referral of the matter to the tribunal.
This argument follows the Competition Commission’s appeal after last year’s judgment in which the Competition Appeal Court (CAC) cleared 13 banks – including Nedbank and Standard Bank- from facing the music in a later trial regarding the rand/US dollar manipulation saga.
Advocate Tembeka Ngcukaitobi, acting on behalf of the Competition Commission, on Tuesday told the Constitutional Court that there was enough evidence to establish a prima facie case that they were involved in the manipulation of the rand.
Gotz said in its application to join Nedbank, the commission pleaded a broad conspiracy against the bank, but the allegations were narrow. The allegations were based solely on the commission’s assessment regarding trading data on the Reuters platform. This platform does not reflect trades – it’s a public platform which simply indicates the prices at which traders are willing to buy and sell currency.
According to him, the case against Nedbank is based on the commission’s assessment of trading data over six years. “This is not a case of Nedbank being a participant in any chatroom – in this respect Nedbank is different from the other respondents,” Gotz said.
He argued that the allegations against Nedbank are skeletal and there are only a few instances which lasted minutes each on the Reuters platform, on which the commission is now relying.
Advocate Kate Hofmeyr, who is representing Standard Bank, said the Competition Commission never bothered to engage Standard Bank when investigating allegations of rand manipulation and price-fixing by local and foreign banks.
Hofmeyr said the commission’s leave for appeal application should be dismissed. This based on the facts it ignored throughout the history of the case.
“This case began 10 years ago. In April 2015, the commission investigated the complaint of rand manipulation and collusion…The commission investigated the complaint for one-and-a-half years. During this time, the commission did not meet with Standard Bank. It did not ask Standard Bank for any information. It did not make a request to Standard Bank for any document, and did not subpoena representatives of Standard Bank.”
“The commission displayed bloody-minded ignorance and did not take into account the facts presented by Standard Bank in its court papers…,” said Hofmeyr.
She said the Competition Commission ought to have behaved like a “responsible public body”. It should have considered the facts presented by Standard Bank in its court papers.
The commission accused several banks of alleged misconduct involving price-fixing and market division.
In February 2017, the commission referred to the tribunal for prosecution a collusion case against Bank of America Merrill Lynch International Limited, BNP Paribas, JP Morgan Chase & Co, JP Morgan Chase Bank N.A, Investec, Standard New York Securities, HSBC Bank, Standard Chartered, Credit Suisse Group, and Standard Bank.
Other banks included Commerzbank, Australia and New Zealand Banking Group Limited. Also Nomura International, Macquarie Bank, Absa, Barclays Capital, and Barclays Bank.
Advocate Chris Loxton, acting on behalf of the Australian and New Zealand banking group, meanwhile, argued that the commission has not pleaded sufficient facts to suggest that his clients were part of a conspiracy to manipulate the rand/US dollar.
He said the commission has not provided details as to why it is alleging these banks partook in the conspiracy and to say that their agents were in some of the chatrooms where the alleged conspiracy took place is not enough.
During today’s proceedings (D3), several foreign banks, including Bank of America and BNP Paribas, maintain that the Commission lacks jurisdiction to prosecute them, as their operations are outside South Africa.
BNP further argued that the case is “vague and contradictory,” with the Commission unable to pinpoint when the alleged conspiracy ended.
The Competition Commission insists that jurisdiction is clear: if conduct impacts the South African economy, local regulators must act.
Head of Cartels Makgale Mohlala argued that, unlike in the US, UK and Europe where traders have been prosecuted for manipulating other currencies, no one has yet been held accountable for rand manipulation.
Ngcukaitobi, told the court that this case represents a “quintessential transnational cartel” and warned against allowing legal technicalities to derail accountability.
He said cartel behaviour leaves permanent damage by distorting import prices and undermining economic stability.
The regulator maintains that the banks’ objections amount to stalling tactics. It argues that whether collusion is ongoing is a matter only the banks can clarify, and that legal disputes should be resolved at trial rather than used to block the case entirely.
At the heart of the matter is whether the Commission can prosecute foreign banks whose conduct affected the rand, and whether the evidence presented is strong enough to sustain a case of collusion.
The judgement has been reserved in the ruling which could reshape how regulators pursue financial misconduct across borders, and determine whether one of South Africa’s most high-profile competition cases ever proceeds to trial.