South Africa's ANC attacks banks over forex rigging charges

Samuel SharpFeb 17, 2017

South Africa's ruling ANC party on Thursday called for the toughest possible sanctions against more than a dozen local and foreign banks accused of rigging the rand currency.


The Commission on Thursday afternoon said in a statement it would proceed to prosecute 17 worldwide banks it alleges were guilty of price fixing and market allocation in the trading of foreign currency pairs involving the rand.

Inducted banks include Bank of America Merrill Lynch International Limited, BNP Paribas, JP Morgan Chase & Co, JP Morgan Chase Bank N.A, Investec Ltd, Standard New York Securities Inc., HSBC Bank Plc, Standard Chartered Bank and Credit Suisse Group.

The commission found that the banks all had a gentleman's agreement dating back to at least 2007 to collude on prices for bids, offers and bid-offer spreads for spot trades on rand-to-dollar exchanges. Investec said it will cooperate with the competition authorites.

A member of the African National Congress Youth League protests in front of ABSA Bank against what they argue is the bank benefiting from an apartheid-era bailout, in Durban, South Africa, January 26. "The fact that some banks may have been partly responsible for the weak and volatile rand through currency manipulation is deeply troubling", the organisation said on Thursday.

Speaking in parliament earlier, South African President Jacob Zuma welcomed the competition commission's investigation, saying that the government was prepared to act against the distortion of the financial markets "to protect our country's economy". The move signals that South Africa's watchdog may be gearing up to open settlement although it did not indicate whether the fines will be imposed on the global revenues of each bank or just to their domestic arms. Zuma has suggested that Standard Bank, Barclays Africa Group Ltd., FirstRand Ltd. and Nedbank Group Ltd. may have colluded when they closed accounts operated by companies controlled by members of the Gupta family, who are his friends and are in business with his son.

Banks working with Commission ABSA said it will continue to co-operate with the Commission during the prosecution of this matter, adding that no fines were brought against the bank.

He called on the government and all state institutions to disassociate themselves from the banks that are involved in collusion.

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