Major South African banks and law firms could be colluding not just to fix the rand, but to collapse other economic players such as smaller companies and black-owned entities.
Admissions by banks such as Standard Chartered and Citibank that they colluded with other banks to fix the rand have sparked widespread outrage and concerns that South African banks could be acting in bigger ways to disadvantage other players in the economy apart from manipulating the rand.
Analysts and observers told “Business Report” yesterday that shareholders in the banks could also be deliberately acting against smaller businesses and black-owned entities. The result of this has been the collapse of small- to medium-owned South African businesses in the past few years.
According to a new report by Start-up Universal, South African small-scale businesses are faced with a “lack of diversity in both the start-up and investor communities” in addition to exchange rate policies.
The banks have not aided their cause as the South African SMEs are mostly precluded from meaningful funding advances that bigger companies are able to access and secure.
“It is not just the rand manipulation that is problematic for black-owned and SME companies in South Africa. There is very limited access to capital and also demands for collateral are disadvantageous,” said one consultant, who declined to be named.
Other observers and commentators wrote on X yesterday that there is a “group of people and companies in very influential seats who manipulate South Africa's currency thereby keeping South Africans in perpetual poverty, joblessness” in addition to decimating the economy through unfavourable treatments.
Minister in the Presidency, Khumbudzo Ntshavheni, has suggested that the manipulation of the rand was part of the private sector’s attempt to collapse the government. Many observers share this sentiment, saying the manipulation of the rand has been a well-crafted and broader strategy to disadvantage the South African economy and players in the country.
“Linked to these banks are large law firms like ENS and their army of lawyers and contracted advocates engaging courts,” said another analyst.
For example, Bret Lang, a former operator of a now-defunct Johannesburg-based multimillion-rand aircraft company, also shared his own experience of what it is like to have his business run into the ground by banks that allegedly colluded to deceive him and destroy his legacy.
Land has accused five banks, Nedbank, Standard Bank, Absa, WesBank, and Investec, of having committed racketeering by allegedly orchestrating the collapse of his R600-million business 14 years ago.
He is not the only one. Several other business founders of South African companies have been complaining about the unfairness and collusion actions of South African banks. Together with big law firms and large accountancy companies, South African banks continue to advantage large white-owned companies, often scandalously colluding to misrepresent company financials as was the case with the now collapsed Steinhoff.
The likes of the Industrial Development Corporation have, however, tried to balance the scale through provision of funding and support to small and black-owned South African companies. This, however, could be complemented by a robust and well-functioning banking and financial services industry that works in the interest of all economic players.