Establishing a commission of inquiry into the contentious forex cartels would be a futile exercise and a waste of resources.
This is according to economics and social security professor at the University of the Witwatersrand, Alex van den Heever, who said the Competition Commission of South Africa is capable of addressing this case and should be allowed to proceed.
Call for commission of inquiry
Van den Heever was reacting to African Transformation Movement leader Vuyo Zungula’s call for an inquiry.
He previously requested an urgent parliamentary debate on the matter but was denied.
Addressing MPs during the State of the Nation Address debate in Parliament on Tuesday, Zungula emphasised the importance of holding the implicated institutions accountable for the damage caused.
“There must be a commission of inquiry to look into the rand manipulation and unethical practices in the banking sector. The action of the banks in fixing the rand is economic treason that has destroyed the lives of many people. People lost their homes and some took their lives because of these banks; we can’t let it slide. Those banks must be held accountable,” he said.
Van Den Heever noted that there was a commission of inquiry established a couple of years ago but that it has not yielded any results to this day.
“The competition legislation has extensive powers to address these kinds of issues.”
“I don’t see what value would be added by a commission of inquiry. This idea is just another political manoeuvre. It comes across as a political attack on the banks,” he said.
The case
The commission initiated the case in 2015, accusing the banks of colluding to manipulate the dollar/rand foreign exchange rate between 2007 and 2013, thereby violating the Competition Act of 1998.
In January, the Competition Appeal Court of SA (CAC) let off the hook on local and international banks implicated in the rigging of the rand due to procedural issues and insufficient evidence to prove the alleged single overarching conspiracy as alleged by the competition commission.
It is understood that three banks were granted leniency in exchange for cooperating with the commission, while only two banks settled their cases by admitting liability and paying a penalty.
Meanwhile, the remaining 23 banks challenged the Competition Commission’s referral to the Competition Tribunal.
In another ruling, the court ruled in favour of several South African banks, including Standard Bank, Nedbank, and FirstRand, as well as most of the foreign banks implicated in the allegations.
Filing an appeal
Earlier this month, the Competition Commission intensified its legal battle, announcing 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.
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.
