Commission needs to rethink its priorities
When Doris Tshepe took over as competition commissioner a year ago there were hopes in the competition community that she would steer clear of costly cases that had no economic benefit for SA. Clearly not. Big egos or big politics have prevailed, with the commission trying yet again to make a go of its nine-year-old banks case, which relates to even older conduct that is alleged to have happened in the New York foreign exchange markets from 2007-2013.
The commission has faced court challenges by most banks it charged with collusion to rig the rand. It has faced humiliating defeats, most recently in the competition appeal court. The court in January dismissed its case against 17 of the 28 banks, finding the commission still had not shown evidence to back its allegations of a “single overarching conspiracy”. This is despite the appeal court giving it the opportunity in 2020 to put a proper case together. Undaunted, the commission is taking the competition appeal court ruling on appeal to the Constitutional Court. The grounds for an appeal on constitutional grounds are doubtful.
At least the commission has conceded it made a complete mess when it charged four of the 28 banks, which anyone could have told it in the first place were holding companies that did not trade. But it is still seeking at the Constitutional Court to get its flimsy case to fly against three big domestic banks Standard, FirstRand and Nedbank and 13 foreign banks. Of the rest, Investec had chosen not to challenge the commission’s case, and the competition appeal court found the commission did have a case against four foreign banks which were implicated in the US case back in 2015.
That the commission is playing dangerous politics is evident from the affidavit it filed to the Constitutional Court last week. The manipulation of the rand/dollar currency pair had a long-term impact on the rand exchange rate, claims the commission a comment which could only have been made by people with zero understanding of foreign exchange trading.
The trades in question were so tiny in the context of a huge market that they could at most have impacted the rand for a few milliseconds. The traders may have ripped off clients but their conduct could not have affected the currency or the country. To suggest as the commission does that they impacted trade or investment or the lives of South Africans is populist nonsense.
In any event, the commission has not so far shown any evidence of the supposed impact on the economy. Meanwhile, it continues to spend taxpayers’ money on a case which could drag on for another five years or more. Imagine if the commission were instead to spend that money opening up markets to competition and challenging the monopolies in electricity and rail that are destroying SA’s economy. Then we could talk about impact.