Cape Town - South Africa's Competition
Commission has granted Barclays Africa conditional
immunity from prosecution in return for its continuing
cooperation in the rand currency trading probe, the head of the
Commission said on Tuesday.
The Commission said last week it had found more than a dozen
local and foreign banks colluded to coordinate trading in the
rand and the U.S dollar using an instant chat room called "ZAR
Domination".
It recommended fines amounting to 10 percent of the banks'
South African revenues in a scandal that has piled political
pressure on the country's big four banks and raised questions
about their dominance in Africa's most industrialised economy.
The local lenders have around a 90 percent market share of
the South African banking market.
"We did, through the investigation, receive a leniency
application from Barclays/ABSA which cooperated and gave us more
information," The head of the Commission Tembinkosi Bonakele
told a parliamentary committee on Tuesday.
"We have a conditional agreement with them on immunity but
this is subject to confirmation depending on the extent of their
cooperation."
Barclays Africa, whose branches a branded ABSA ans is a
regional subsidiary of Barclays Plc, did not
immediately respond to a request for comment.
On Monday the Commission said that the local arm of
Citigroup had agreed to pay a reduced $5 million penalty
in settlement for its role in the alleged currency trading
cartel after it "undertook to cooperate".
"I would say that the settlement was low, but as a
prosecutor you sometimes have to make these calls because we
have a bigger case to run," Bonakele said on Tuesday, referring
to Citi.
The scandal has rattled the share prices of the South
African-listed banks, with the sector index having
dropped by nearly 4 percent over the last four sessions.
Anglo-South African investment bank and asset manager
Investec has said again following a statement
made earlier this week that it would seek further information
from the regulator in order to continue to cooperate, according
to an internal memo seen by Reuters.
"The Competition Commission's case against Investec Limited
is confined to the alleged conduct of a single trader who is
employed by the bank. This particular trader dealt with
interbank clients," Investec said in the memo.
Revenue from Investec's foreign exchange division averaged
below 1 percent of its South African bank's total revenue over
the last 10 years, according to the memo. Investec's local
banking unit reported 10.4 billion rand in total operating
income in the year ended March, 2015.
Global scandal
The Commission began its investigation in April 2015,
joining an international probe into the manipulation of foreign
exhange rates that has led to big banks paying more that $10
billion in settlements.
Former Citigroup foreign exchange dealer Christopher Cummins
and Jason Katz, who worked at Barclays and later BNP Paribas SA,
pleaded guilty in the United States to conspiring to fix
currency prices last month.
Both, along with several others, are named in the South
African regulator's report on its investigation that has been
referred to the Competition Tribunal, which holds hearings on
antitrust matters before giving a ruling.
Bonakele said the Commission was seeking a maximum penalty
against other banks whose traders are alleged to have been
involved in the scandal but the "door was not closed" for those
seeking to apply for leniency in exchange for information that
would help lead to a successful prosecution.
President Jacob Zuma said last week that the government
would clamp down hard on financial market abuse.
Other banks and brokerages named in the case were Nomura
, Standard Bank, Investec, JP Morgan
, BNP Paribas, Credit Suisse Group,
Commerzbank AG, Standard New York Securities Inc,
Macquarie Bank, Bank of America Merrill Lynch (BAML)
, ANZ Banking Group Ltd and Standard Chartered
Plc
Officials at Standard Bank, BAML, Commerzbank, BNP Paribas,
Nomura, Credit Suisse, ANZ, Macquarie and Standard Chartered
have so far declined to comment. The other banks have not
responded to requests for comment.