By Ragheema Mclean
Earlier this month, the Competition Commission of South Africa imposed a R42 million fine on British multinational bank, Standard Chartered Bank (SCB), following its admission of involvement in currency manipulation.
The commission revealed that SCB had engaged in manipulating the USD/ZAR currency pair through various means such as fixing bids, offers, bid-offer spreads, spot exchange rates, and rates at the FIX.
This manipulation significantly affected the South African Rand’s exchange rate, subsequently impacting several sectors of the economy.
This includes, import and export trades, foreign direct investment, public and private debt, and company balance sheets were affected, leading to potential implications for the prices of goods, services, and financial assets.
Speaking on the VOC Breakfast show on Thursday, Spokesperson to the commission, Siyabulela Makunga, stated that the investigation commenced in April 2015 and clarified that they had been following the matter since 2013.
“The matter has been going on since 2007 up until September 2013.”
He explained, “The case spanned from 2007 to September 2013, initially involving 26 banks, later expanded to 28 banks due to complaints.”
“The milestone for us was that SCB admitted that they were involved in the conduct and agreeing to cooperate in the prosecution of the other banks involved.”
Makunga said that the commission welcomes SCB’s decision to reach a settlement on this matter and all other respondent banks are encouraged to consider settling the complaint against them.
Meanwhile, public sentiment demanding stricter consequences for currency manipulation by local and international banks has been echoed by organisations, political parties, and individuals.
Makunga clarified the commission’s role, stating, “Our mandate focuses on prosecuting prohibited conduct, abuse of dominance, and collusion. Our actions are limited to civil proceedings.”
He further elaborated on penalties, mentioning, “Upon finding guilt, we ensure payment of up to 10% of total revenue during the contravention period.”
“The matter is currently before the Competition Appeal Court and we really relying on the collective wisdom of the justices that were presiding over the matter,” he concluded.
Photo: Pixabay
