The Competition Appeal Court of South Africa has dismissed a high-profile case after the Competition Commission accused 28 major banks, including Standard Bank, Nedbank and FirstRand, of colluding to manipulate the dollar/rand foreign exchange rate in 2015.
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The court’s ruling was handed down yesterday, 8 January, clearing all but four of the banks mentioned in the original investigation.
The court reportedly criticised the Competition Commission’s case, dismissing it on the grounds of a lack of evidence, a lack of jurisdiction and overreach.
Among the accused institutions was Standard Bank, which welcomed the court’s decision.
‘The Competition Appeal Court handed down its judgement on 8 January 2024 which accepted the bank’s incontrovertible evidence over a period of seven years that it had not been party to an international conspiracy to manipulate trading in the USD/ZAR currency pair and consequently held that the Competition Commission’s complaint in that regard is dismissed,’ the bank said in a statement.
‘Standard Bank has always maintained that the Group is wholly committed to the rule of law, respects the important role of institutions, and upholds South Africa’s Constitutional democracy and our Constitutional obligations to ensure that our country improves the quality of life to all citizens,’ the bank added.
‘In its ruling, the Court concluded that the case against Standard Bank “does not get out of the legal starting blocks”.’
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The currency manipulation saga began in 2015 when 19 banks (later expanded to 28) were alleged to have been involved in a ‘single over-arching conspiracy’ to fix the rand, according to the Competition Commission, which presented a series of 158 chats spanning over seven years (2007 and 2013) between traders in private online chatrooms.
As key evidence, these chats alleged that the traders were conspiring to make profits for themselves, reduce risk and avoid losses when dealing in the dollar/rand currency pair, reported Moneyweb.
Legal representatives for the accused banks, however, deemed the chats ‘flimsy evidence’, arguing that the chats were often vague and could not be tied to any instances of alleged currency manipulation.
Standard Chartered Bank has since agreed to settle the case last year and pay a fine of R42.7 million for its part in the scandal.
According to the court’s ruling, sufficient facts now leave Investec, which chose not to join the appeal lodged by the other banks, JP Morgan, BNP Paribas, HSB and Credit Suisse, to face trial in this almost decade-long currency manipulation saga.
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