Rand-rigging probe paused after Competition Commission mix-up
The Competition Commission mixed up the legal entities of some banks named in a currency manipulation probe and delayed hearings to reconsider the case, according to people familiar with the matter.
At a pre-hearing in Pretoria on June 23, the Competition Commission’s lawyers indicated that some complaints may be applied to new legal entities, the people said, asking not to be identified because the meeting was private.
The commission may have to devise a new strategy that could see it charge lenders individually rather than as a group, one of the people said.
Hearings with the banks accused of rigging the rand, scheduled to start on July 20, "have been taken off the roll at the request of all parties concerned", the Competition Tribunal said in an e-mailed statement on Wednesday.
The tribunal, which rules on competition matters referred by the commission, asked all parties if transcripts of the private June 23 meeting could be published, but not all those concerned responded to the request, the regulator said.
The commission alleged in February that 14 banking entities colluded to manipulate the value of the rand.
In filings in May, HSBC and Investec said the commission had named the wrong legal entities.
Standard Bank Group’s South African unit, Bank of America Merrill Lynch International and Standard New York Securities all said the traders the commission accused of manipulation on their behalf had either never worked for them or had never traded the rand.
The rand-rigging hearings would be rescheduled when the commission made the request, the tribunal said, without giving reasons for the delay in proceedings.
Standard Bank’s general counsel, Ian Sinton, said in an e-mailed response to questions on Tuesday that the antitrust regulator’s lawyers indicated at the hearings that the commission would revoke its complaint against some lenders and may accuse others.
Standard Bank misunderstood what happened at the closed hearing, 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 on Tuesday. "It’s an error. It doesn’t mean we’ll never press any new charges against any other banks."
Some lenders said in the papers filed in May that the competition watchdog had no jurisdiction because there was no evidence the trades happened inside the country or had any effect on the economy.
The commission was asked by the Competition Tribunal and lenders to make a clearer argument about its ability to target non-South African entities, the people said.
The commission argued that because trades were made in the rand, it would have affected the country, according to one of the people.
JPMorgan Chase, Credit Suisse Group, HSBC Holdings, Nomura International and Commerzbank declined to comment. Standard Chartered did not respond to e-mailed questions. Australia and New Zealand Banking Group and Macquarie Group did not immediately reply to phone messages.