Rand manipulation shows corruption has hit multifaceted, complex levels in SA

Rand manipulation in the spotlight. File photo: EPA

Rand manipulation in the spotlight. File photo: EPA

Published Feb 8, 2024


Manipulation of the rand by local and international banks indicate that corruption had hit complex and multifaceted levels in South Africa as it involved public and private spheres though well-knitted networks that required a dedicated anti-corruption agency to unravel, Corruption Watch said yesterday.

Some banks, including Standard Chartered, singled out by the Competition Commission, have already admitted colluding to fixing the rand between 2007 and 2013 and paid fines. However, others are digging in, saying they were not involved in rand manipulation.

The Competition Commission is now appealing at the South African Constitutional Court against the Competition Appeal Court’s judgment, which upheld the appeal by the majority of the respondent banks accused of price-fixing and division of markets in contravention of the Competition Act.

“The CAC order, therefore, released 17 respondent banks from the complaint referral before they answered the allegations against them and restricted the Commission’s case to only four respondent banks. In its current application for leave to appeal, the Commission is appealing the CAC order to the Constitutional Court against 13 respondent banks,” said the Competition Commission in a statement on Tuesday.

These banks include Standard Bank, Nomura International, and JPMorgan Chase Bank, among others. The Commission is, however, not appealing against the CAC order in respect of the Nedbank Group Limited, FirstRand Limited, Credit Suisse Group, and Standard New York Securities Inc.

Zwelinzima Vavi, the general secretary of South African Federation of Trade Unions, said yesterday that the union supported the Competition Commission’s appeal to the Constitutional Court in its bid “to hold the local and international banks accountable for the rand/dollar manipulation” over the period in question.

Corruption Watch’s stakeholder relations and campaigns lead, Melusi Ncala, toldBusiness Report” by phone yesterday that the rand manipulation saga was a mirror of the multifaceted nature of corruption in South Africa.

“Rand manipulation basically indicates that corruption is indeed a quite complex issue. It’s multifaceted. It involves networks. It crosses between public and private sector,” said Ncala.

Worse still, corruption, as exposed by the admittance of guilt by some of the banks that were involved in the manipulation of the rand “can be quite opaque”, hence, there is need for stern efforts and action to deal with it.

Ncala added: “There needs to be a concerted effort in dealing with it. If anything, we need a dedicated anti-corruption agency that can look into ongoing occurrences of corruption, such as these ones (rand manipulation) to support work done by the Competition Commission and other institutions.”

Corruption Watch said it was “good for the Competition Commission to satisfy itself, given the importance of this matter” by taking the CAC order to the Constitutional Court.

It said the rand manipulation saga “speaks to one of the fundamentals of the South African economy” amid reports that the impact of the underhand dealings between banks’ forex dealers ran into trillions of rand.

”When (we) consider that these banks are facing serious allegations about how they manipulated, allegedly, the currency, we know it’s a matter that definitely needs to be exhausted so that people also on the ground can be satisfied,” said Ncala.

Other analysts said the fact that some banks had already admitted to manipulation of the rand/dollar exchange and had paid fines to the Competition Commission meant that the Commission had a stronger case against the other banks.

Standard Chartered has agreed to avail evidence and information that incriminates some of the other banks in its settlement with the Competition Commission.

Competition Commissioner Doris Tshepe said this appeal would provide the Constitutional Court with an opportunity to pronounce on whether the South African competition authorities have jurisdiction to investigate and prosecute firms that are based outside the Republic whose anti-competitive conduct affects the South African economy.