Standard Bank is among firms seeking to access information gathered on them during investigations. Picture: FINANCIAL MAIL
Standard Bank is among firms seeking to access information gathered on them during investigations. Picture: FINANCIAL MAIL

In a precedent-setting case, the Competition Commission has gone to the Constitutional Court to prevent companies, including Standard Bank, from accessing information gathered on them during investigations.

The commission told the apex court on Tuesday that giving Standard Bank access to information it has gathered against 23 lenders accused of price-fixing in the foreign exchange (forex) market will give it an unfair advantage.

The commission’s lawyer, Tembeka Ngcukaitobi, said premature access could enable Standard Bank to hold back any information it realises wasn’t part of the commission’s investigation.

At the same time, but in a separate matter, the commission also asked the Constitutional Court to prevent six companies suspected of collusion on an Eskom tender from accessing its investigation’s documents. 

The companies are Waco Africa, Tedoc SGB Cape, Superfecta SGB Cape, Mtsweni SGB Cape, Tedoc Industries, Superfecta Trading and Mtsweni Corrosion Control.

This is the first time a case like this has been brought before the Constitutional Court and could have widespread implications for companies accused of collusion if it finds in favour of the commission.  

In a case against Group Five in 2016, the Competition Appeal Court ruled that the construction company should have access to unrestricted parts of the commission’s investigation documents before answering. However, the commission did not escalate the matter to the Constitutional Court. 

Standard Bank is among 23 banks the commission began investigating for suspected collusion in forex trading in 2015. It referred Standard Bank to the Competition Tribunal for prosecution in 2017.

“We are told, give us everything you have collected so far, including what we have collected in relation to other participants that we have not yet referred to the tribunal,” said Ngcukaitobi.

He said because the commission’s investigation into the other banks is still open, handing over its records to Standard Bank could warn them about areas where the commission is not yet certain if it has enough evidence against them and thus present an opportunity for them to destroy evidence.

“The ability of the commission to investigate effectively needs to be protected. The most important instrument in the hands of the commission is documents. If these documents are not safeguarded properly, the investigating capability may be threatened,” said Ngcukaitobi.

Competition regulations do, however, allow members of the public access to the commission’s investigation records. But the commission said accused companies are prohibited unless they apply under different rules where they are required to prove they need the document to plead.

The stakes are high for Standard Bank if found guilty by the tribunal. It could be fined a sum equal to 10% of Standard Bank SA’s turnover. The bank’s lawyer, Jeremy Gauntlett, told the Constitutional Court that Standard Bank is in the dark about charges it is facing. He said the commission’s argument that the bank would tailor its plea if it has access to its documents is far-fetched.

“It was not a claim for a tip-truck of every piece of paper that the commission may have. It is one of those incidents where you hear on the news that there has been an investigation and a referral,” he said.

The bank claimed in its written submission that it learnt through media releases that the matter had been referred to the tribunal.

“Either there’s a case lawful and good enough for referral, which the commission should not be afraid to have scrutinised, or there isn’t. There’s no danger of tempering because they have what they have and if we get a copy of their investigation, we are not taking it away from them. They got their case in the vault,” said Gauntlett.

The investigation into the companies suspected of colluding on the Eskom tender is a separate matter the commission started investigating in 2017. The two cases were heard together since defendants in both cases want access to investigation documents before answering the commission.

Representing these companies, senior counsel Michelle le Roux said it is absurd that the entire world could have access to documents except the accused.

buthelezil@businesslive.co.za