Advocate Tembeka Ngcukaitobi represented the state against the banks during Wednesday’s hearing in Sandton. Picture: Itumeleng English Independent Newspapers
The Competition Commission is reportedly looking into whether criminal charges can be brought against banks accused of manipulating the rand’s value.
On Wednesday, UK-based Standard Chartered Bank (SCB) admitted to being one of 28 banks responsible manipulating the US dollar-rand exchange rate between 2007 and 2013.
Following lengthy litigation, an agreement was reached for the bank to pay over R42 million in administrative penalties.
In a statement, the commission said SCB was no longer involved in currency manipulation and had committed itself to co-operating with the work of the commission.
The commission’s Divisional Manager for Cartels, Makgale Mohlala, told the SABC: “Standard Chartered has undertaken to co-operate with the commission in the prosecution of the other respondent banks.
“And most importantly, they have undertaken to provide the commission with evidence that is in its possession. (Evidence) that will assist the commission in the prosecution of the remaining three banks that are currently being prosecuted.”
Mohlala said the commission, which is currently hearing the appeal being made by other banks, was confident that its co-operation with five of 28 banks would assist it in prosecuting the remaining banks in the foreign exchange case, with the five banks expected to provide evidence that would assist the commission in the case.
“In addition, SCB agrees to provide evidence, written or otherwise, which is in its possession or under its control (and which is not subject to legal privilege),” he said.
On Wednesday, the EFF called for tougher sanctions against banking institutions that played a role in collusion by lenders to manipulate the rand.
IOL reported earlier this week that SCB had admitted guilt and agreed to pay a R42.7m fine.
The EFF lambasted the South African Reserve Bank, saying the apex bank failed to oversee the country’s banking sector.
EFF national spokesperson Sinawo Thambo said: “The failure to deal with currency manipulation, however, is just a symptom of a banking sector that is a law unto itself.
“The South African Reserve Bank has failed to oversee the banking sector because of friendship-based nepotism, which has led to the revolving door of staff members between the banks, the National Treasury, and the Reserve Bank.”
On Wednesday, following SCB ‘s admission of guilt, Efficient Group's chief economist, Dawie Roodt, said the banks had withheld certain information as well as gave customers preference over others which interfered with the regulations.
“These banks are accused of having manipulated the price of rands and dollars as most most of the dealer banks have a special licence which allows them to buy and sell currency. People are not allowed to do that, but banks are allowed to do that and it is alleged that they manipulated the price of rands and dollars by withholding certain information or by giving some customers the preference in this and in the process some people got benefits because they got dollars or rands at a better price,“ he said.
The EFF called for tougher sanctions to be imposed on the banks and anyone found guilty of currency manipulation.
Thambo said: “The EFF maintains that all those who admit guilt to the charges of currency manipulation must lose their banking licenses. Furthermore, the directors and staff members who were involved must also be prosecuted, and their assets must be seized.”
The Star
siyabonga.sithole@inl.co.za
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