‘Mix-up’ leads to delay in currency probe hearings

Competition Commission investigators have mixed up the legal entities of banks named in the currency manipulation probe and delayed hearings so that they can reconsider the case, sources say.

At a pre-hearing in Pretoria on June 23, the commission’s lawyers indicated that some complaints might be applied to new legal entities, people familiar with the matter say.

The commission might have to devise a new strategy that could lead to it charging lenders individually rather than as a group.

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 on Wednesday.

The commission alleged in February that 14 banking entities colluded to manipulate the value of the rand.

In filings in May, HSBC Bank and Investec Bank 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 never traded the rand.

Standard Bank general counsel Ian Sinton said the commission’s lawyers indicated at the hearings that it would revoke its complaint against some lenders and might accuse others.

Standard Bank misunderstood what happened at the closed hearing, Competition Commissioner Thembinkosi Bonakele said on Radio 702 on Tuesday.

“There’s no truth at all that we may withdraw any allegations against any banks.”

Some lenders said in the papers filed in May that the Competition Commission 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 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 rand, it would have had an effect in the country, said one.