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SA regulator disputes dropping of rand-rigging charges

Standard Bank said charges against some banks to be dropped.

South Africa’s Competition Commission said it’s continuing with charges against all banks named in its rand-rigging probe after the continent’s biggest lender earlier said allegations would be withdrawn against some of the institutions.

Standard Bank Group Ltd. general counsel Ian Sinton said in an emailed response to questions Tuesday that the antitrust regulator would revoke its complaint against some lenders and may accuse other banks of collusion and manipulation of currency trades instead. Standard Bank misunderstood what happened at a closed hearing on Friday, according to Competition Commissioner  Thembinkosi Bonakele.

“There’s no truth at all that we may withdraw any allegations against any banks,” Bonakele said in an interview on Johannesburg-based Radio 702. “It’s an error. It doesn’t mean we’ll never press any new charges against any other banks.”

Fourteen banking entities, including HSBC Holdings Plc, BNP Paribas SA, Credit Suisse Group AG and JPMorgan Chase & Co. were named by the commission in February as having been allegedly involved in illegal rand trades. Barclays Africa Group Ltd. was exempt because it blew the whistle on the traders’ alleged actions while Citigroup Inc. agreed to pay a R69.5 million ($5.4 million) fine for its alleged role. 

‘Vague, Embarrassing’

Some of the banks said in legal documents in May that the commission’s complaint was vague and embarrassing, and demanded it be amended or dropped. Some of the lenders also said that there were no allegations that the banks carried out prohibited practices within South Africa or if they had any effect in the country, arguing that the antitrust regulator therefore had no jurisdiction. BNP Paribas at the time criticized the commission for saying that a defendant represented Standard Bank’s New York unit and Barclays at the same time.

Ross Linstrom, spokesman for Standard Bank, didn’t reply to a text, phone message or an email sent on Tuesday seeking the lender’s response to the commissioner’s statements. A call to his mobile phone on Wednesday wasn’t answered. The bank, which was among those named in February, declined earlier to say which lenders may be removed and which could be added.

JPMorgan, Credit Suisse and Commerzbank AG declined to comment and Investec Plc said it couldn’t immediately comment. Standard Chartered Plc didn’t immediately respond to emailed questions.

“The foreign-exchange litigation is on track and we are fairly content with how things are unfolding,” Competition Commission spokesman Sipho Ngwema said in an emailed response to questions Tuesday.

The commission in February recommended the banks be fined 10 percent of the revenue from their foreign-exchange units. Aside from using a common trading platform, holding meetings and discussing strategy over the phone, the traders had an instant messaging chatroom called “ZAR Domination” where they would agree on their currency trades, the regulator said.

According to Standard Bank’s Sinton, representatives of the accused banks and the Competition Commission agreed June 23 to cancel formal hearings scheduled to start on July 20 so that the regulator had time to amend its complaint.

© 2017 Bloomberg L.P

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Stephen Katzenellenbogen

Stephen Katzenellenbogen

NFB Private Wealth Management
Moneyweb Click an Advisor
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