CompCom gets the upper hand

Ray Mahlaka

The agreement by Standard Chartered to pay $40 million (R536 million) in fines to settle claims from US authorities related to manipulation of currency prices, including the rand, might be grim news for the commercial bank in SA.

While Standard Chartered has admitted to the New York state department of financial services that it manipulated currencies, it’s waging a protracted fight in SA with the Competition Commission (CompCom) on similar charges.

In an order issued on January 29, US financial services authorities said Standard Chartered engaged in “unsafe, unsound and improper conduct” in its foreign exchange business between 2007 and 2013.

The conduct refers to Standard Chartered currency traders who sought to coordinate and manipulate prices with peers at other banks to move the rand and other emerging market currencies.

“Standard Chartered traders used a variety of improper tactics to benefit the bank – and themselves – by maximising profits or minimising losses at the expense of the bank’s customers, or customers of other banks that were impacted by the misconduct,” reads the US financial services authorities’ order.

Some of the improper activity by at least three Standard Chartered traders was conducted through e-mails, phone calls and an online chat room called Old Gits.

“I think we need an Old Gits meeting to discuss good olé [South African rand] manipulation. We should be able to bully people now far more than any other [currency],” said one trader in the chat room in January 2008, the order document reads.

The CompCom said the order by the US financial service authority on Standard Chartered would boost its case in SA.

“The order puts the banks on the spot. They have pleaded guilty overseas on the same charges and merits we have brought but pleaded something else in South Africa because they have deep pockets to fight the commission,” CompCom spokesperson Sipho Ngwema told Moneyweb.

Commenting on the inclusion of Standard Charted traders and their attempts to manipulate the rand, Standard Chartered’s Geraldine Matchaba said the bank will continue to cooperate with the CompCom’s investigation.

Moneyweb

The Energy Intensive User Group (EIUG), which represents large energy users who collectively consume more than 40% of Eskom’s electricity supply, expects President Cyril Ramaphosa to make an announcement in tonight’s State of the Nation address about government’s assistance to Eskom.

And it should be more than the R100 billion Eskom has suggested, says EIUG project manager Shaun Nel.

Nel spoke to Moneyweb on the sidelines of national energy regulator Nersa’s public hearings about Eskom’s application for steep tariff increases in the next three financial years.

Eskom initially applied for a 15% increase annually for the next three years, but revised its application recently to 17.1% in 2019/20, 15.4% in 2020/21 and 15.5% in 2021/22.