Citibank hit with R70m fine
CITIBANK is to pay a fine of almost R70-million for colluding on selling and buying rands.
The bank settled with the Competition Commission and it filed the settlement with the Competition Tribunal yesterday.
Competition Commissioner Tembinkosi Bonakele said: “This settlement was done to encourage speedy settlement and full disclosure to strengthen the evidence for prosecution of the other banks.”
The commission found that since at least 2007‚ Citibank NA 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 R69.5-million.
This figure is not related to Citibank’s annual turnover in South Africa‚ the Competition Commission said. But it said it had worked with the commission.
“Citibank NA undertook to cooperate with the commission and avail witnesses to assist the prosecution of the other banks that colluded in this matter.”
Last week, the Competition Commission referred a collusion case to the Competition Tribunal for prosecution against Bank of America Merrill Lynch International Ltd‚ BNP Paribas‚ JP Morgan Chase & Co‚ JP Morgan Chase Bank NA‚ 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 Ltd‚ Nomura International plc‚ Macquarie Bank Ltd‚ Citibank NA‚ Absa Bank Ltd, Barclays Capital Inc‚ and Barclays Bank plc.
It has asked that the banks be found in breach of the Competition Act and be faced with a fine of 10% of their annual turnover.
Absa Bank is not facing a fine because it cooperated 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 the authorities jurisdiction over business dealings that have taken place within South Africa.