Competition Commission takes forex cartel case to ConCourt

The Competition Commission has intensified its legal battle in the case of purported currency manipulation.

In a statement on Tuesday, the commission stated that it would ask the Constitutional Court (ConCourt) for permission to appeal a recent ruling by the Competition Appeal Court of South Africa (CAC).

This development comes after a January ruling in which domestic and foreign banks linked to rand manipulation were essentially cleared because of procedural errors and a lack of evidence supporting the commission’s claim of a single, broad conspiracy.

Several banks are charged with conspiring to manipulate the dollar/rand exchange rate between 2007 and 2013, in violation of the Competition Act of 1998.

The case was started in 2015.

As a result of the commission’s work, three banks received leniency for their cooperation, and two other banks reached a settlement by acknowledging their mistakes and paying fines.

Referral to the tribunal disputed

The 23 remaining banks have disputed the commission’s referral of the matter to the Competition Tribunal.

Notably, the ruling of the CAC mandated that the four banks — JP Morgan Chase and Co., HSBC Bank Plc, Credit Suisse Securities (USA) LLC, and BNP Paribas — submit their rebuttal affidavits no later than 40 days.

Meanwhile, it released 17 other banks from responding to the allegations.

Notwithstanding the setback, the commission declared its plan to appeal the CAC’s ruling concerning 13 banks, including well-known institutions like Standard Bank of South Africa, JP Morgan Chase Bank N.A., and Bank of America Merrill Lynch.

The commission stated that the appeal will not apply to decisions involving Nedbank Group Limited, FirstRand Limited, Credit Suisse Group, and Standard New York Securities.

Defining the boundaries

It added that it would not contest the CAC’s dismissal of appeals by the other four banks too, acknowledging the cooperation of Absa, Barclays Capital, and Barclays Bank through leniency applications, along with settlements reached with Citibank and Standard Chartered Bank.

Commissioner Doris Tshepe emphasised the appeal’s importance, saying it gives the Constitutional Court a chance to define the boundaries of competition authorities over international businesses whose activities have an impact on the South African economy.

“This appeal will 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 of the Republic whose anti-competitive conduct affects the South African economy,” she said.

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