JOHANNESBURG - Standard Bank’s spirited fight against the Competition Commission in the foreign exchange collusion scandal that rocked the banking sector earlier this year failed to pass the first hurdle after the Competition Tribunal yesterday denied it access to the record of the commission’s evidence against it.
The bank, which was implicated with 17 other banks in collusion over the rand-dollar currencies trades, lodged a separate application against the commission, relying on the rule that allows implicated parties access to the anti-graft body’s records when it refers investigations to the tribunal. However, the tribunal rebuffed the request and said the bank was not yet entitled to have the records.
The tribunal held that the rule provided for production had to be made within a reasonable time.
“On the facts of the present Forex case, given the length of the record, the extent of confidential information in it, and the burden it would place on the commission in preparing it, a reasonable time for production would be at the same time as discovery is made in the Forex case,” the Tribunal said in its ruling.
“The Tribunal also held that a person could seek earlier production of the record if it provided a good reason for this. In the present case, Standard Bank, although asked by the Commission to provide reasons, had not done so.”.
None of the banks implicated in the forex probe has filed answering affidavits. The tribunal said this was because it still needed to hear certain objections brought to the commission’s referral, based, inter alia, on whether the tribunal had jurisdiction over them and whether the referral contains sufficient specificity. These objections will only be heard in January next year.
Earlier this year the commission said that it was investigating a case of price-fixing and market allocation in the trading of foreign currency pairs involving the rand by more than 15 South African and international banks. The commission requested the tribunal to take 10 percent of the 14 of the other implicated banks’ annual turnover as punishment.
After releasing its financial results earlier this year, Standard Bank’s co-chief executive Sim Tshabalala said that the bank had not set aside any cash to pay the fine for the alleged collusion.
“We’ve trawled chat rooms, phone calls; we’ve gone through thousands of records and have not come across any (collusion). (The traders) have been very clear that they are not guilty of any form of collusion,” Tshabalala said at the time.
Standard Bank’s rivals Absa is among the three banks that had admitted their guilt in the collusion. US-based Citibank has already been fined close to R70 million after it also admitted guilt and agreed to provide the graft agency with evidence implicating the other implicated banks. Ahmore Burger-Smidt, a director at Werksmans Advisory Services, on Monday, said consideration had to be given the concept of restricted as well as confidential information in assessing Standard Bank’s discovery application. “One would, therefore, expect, in the interest of proper administration of justice, that respondents be granted access to information forming the basis of the prosecution.” “Why otherwise would the Competition Act specifically provide for a carve-out when it comes to confidential information and state that it is not a breach of confidence if this information is disclosed in order to achieve the proper administration of justice?,” Burger-Smidt said.
- BUSINESS REPORT