Citibank in R70m settlement

BANK COOPERATES IN COLLUSION CASE

CITIBANK is to pay a fine of almost R70-million for colluding on selling and buying of the rand.

The bank settled with the Competition Commission and it filed the settlement with Competition Tribunal yesterday.

“This settlement was done to encourage speedy settlement and full disclosure to strengthen the evidence for prosecution of the other banks‚” said the commissioner‚ Tembinkosi Bonakele.

The commission found that from at least 2007‚ Citibank N.A. and its competitors had a general agreement to collude on prices for bids‚ for the spot trades in relation to currency trading involving US dollar/rand currency pair.

It found that Citibank and its competitors manipulated the price of bids and offers through agreements to refrain from trading and creating fictitious bids and offers at particular times.

Citibank will pay an administrative penalty of R69 500 860.

This figure is not related to Citibank’s annual turnover in South Africa‚ the Competition Commission said.

But it said it had worked with commission in the investigations.

“Citibank N.A. undertook to cooperate with the commission and availed witnesses to assist the prosecution of the other banks that colluded in this matter.” said Bonakele.

Last week the Competition Commission referred a collusion case to the Competition Tribunal for prosecution against Bank of America Merrill Lynch International Limited‚ BNP Paribas‚ JP Morgan Chase & Co‚ JP Morgan Chase Bank N.A‚ Investec Ltd‚ Standard New York Securities Inc‚ HSBC Bank Plc‚ Standard Chartered Bank‚ Credit Suisse Group; Standard Bank of South Africa Ltd‚ Commerzbank AG; Australia and New Zealand Banking Group Limited‚ Nomura International Plc.‚ Macquarie Bank Limited‚ Citibank N.A.‚ Absa Bank Limited (Absa)‚ Barclays Capital Inc‚ and Barclays Bank plc.

It has asked the banks be found in breach of competition act and be faced with a fine of 10% of their annual turnover.

Absa Bank is also not facing a fine because it co-operated with the commission and is believed to have blown the whistle on corrupt trades and provided evidence of traders chatting in chat rooms about fixing a price for certain trades.

Some lawyers believe the tribunal will have a tough case proving the case‚ as the trades took place offshore and the Competition Act only gives authorities jurisdiction over South Africa.

“Citibank N.A. undertook to avail witnesses to the commission