Political parties and activists have lobbied the government to take drastic steps against the bank cartel responsible for the currency manipulation scheme.
They argue the rogue cartel has caused inflation, devalued the currency, and caused job losses. The government has also been urged to impose stricter regulations on banks to prevent similar future activities.
The man who originally blew a whistle on rand price fixing in 2001, Kevin Wakeford, said currency manipulation would not have succeeded without “some level of complicity involving people in power”.
In a Sunday World exclusive interview this week, Wakeford called for disaggregating banks and reviewing banking legislation. “The banks, just like the government, should be held accountable. We cannot have wolves taking care of the chicken pen. For things like these to manifest, there must be some level of complicity involving people in power,” he said.
“Our banks are very powerful players in the country’s political economy, not just in the financial sector. They can close your account, shut you down as a
citizen of the country or a business, without any reason.”
According to the Competition Commission, they are investigating 28 banks and individuals for conspiring to manipulate the rand between 2007 and 2013.
Wakeford said many people had lost their jobs, houses and cars because of rand manipulation and price fixing. “Consumer prices skyrocketed, and the biggest losers were the poor and the middle class as inflation and interest rates skyrocketed.
UDM deputy president Nqabayomzi Kwankwa said the implicated banks should have their banking licences revoked.“We need punitive measures. Remember the collusion that happened with stadium construction in 2010? They inflated prices by R14-billion, were made to pay a fine of R117-million, and were meant to create a R1.4-billion fund for emerging construction companies. Imagine such nonsense,” said Kwankwa.
“Imagine I steal from you a R1 000 and you catch me, and I give you a R400 as a fine. This is nonsense. And it only happens when you deal with white-collar crime.”
On the role of politicians, Kwankwa said there was no way those in charge of the finance cluster, like cabinet ministers, heads of departments in the form of DGs, and heads of the central bank, could not have known what was happening.
He said the scandal was downplayed because white people were involved. “No one even knows where and what type of houses the CEOs of these banks stay in but black people’s houses would be paraded all over.”
ActionSA’s Herman Mashaba said that in any civilised nation where the rule of law is respected, the law must take its course. “Right now,” said Mashaba, “we are speculating instead of having a criminal justice system that does its work, and the current system cannot be trusted. “
ATM’s Vuyo Zungula said the party had written to President Cyril Ramaphosa, requesting the formation of a commission of inquiry into the rigging of the rand. The party also wrote to National Assembly Speaker Nosviviwe Mapisa-Nqakula, requesting an urgent debate on the matter, but she declined.
Furthermore, Zungula penned a letter to Finance Minister Enoch Godongwana imploring him to ensure that “punitive measures” were taken against the implicated banks.
About politicians who have shares in banks, Zungula said: “That is why we want a commission of inquiry that would determine if some politicians used their positions to benefit or protect banks from effective scrutiny.”
IFP national spokesperson Mkhuleko Hlengwa said: “In light of these revelations, the IFP calls for stronger regulatory measures to prevent and address such misconduct in the future. Financial institutions must be held accountable for any actions that undermine fair competition and transparency.”
The general secretary of the South African Federation of Trade Unions, Zwelinzima Vavi welcomed the deal the commission has with Standard Chartered Bank. “If you look at the consequences of what they have done, directly from these manipulations, we have seen a seven-fold increase in the interest rate. “Thousands of workers have been laid off. Thousands of small microindustries have been closed down and liquidated. The homes of mothers, fathers, and sisters have been repossessed. Cars have been repossessed.” Vavi added. He also bemoaned that the CEOs of the implicated banks weren’t charged with treason and accused the Reserve Bank of being complacent in the matter. He also added that some members of parliament might be complicit in this matter as to “why no action was taken all these years.”
Cosatu general secretary Solly Phethoe said those involved and implicated in the scandal brought a lot of challenges for workers, and there must be serious consequences.
“Among other things we want to discuss with the leadership is looking at what form of compensation workers who suffered because of the rand manipulation can be reached. If nothing is done to compensate workers, as organised labour we have other avenues with which we can pursue the matter,” Phetoe said.
