‘Legal entities in probe of banks mixed up’
SOUTH African antitrust investigators mixed up the legal entities of some banks named in a currency manipulation probe and delayed hearings so they can reconsider the case, according to people familiar with the matter.
At a pre-hearing in Pretoria last week, the Competition Commission’s lawyers indicated that some complaints may be applied to new legal entities, the people said, asking not to be identified because the meeting was private. More hearings scheduled to start next month have been delayed and the commission may have to devise a new strategy that could see it charge lenders individually rather than as a group, one of the people said.
The commission in February alleged that 14 banking entities colluded to manipulate the value of the rand. In filings in May, HSBC Bank and Investec said the commission named the wrong legal entities. Standard Bank’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’s general counsel, Ian Sinton, said on Tuesday that the antitrust regulator’s lawyers indicated at the hearings that the commission would revoke its complaint against some lenders and may accuse others. Sinton said representatives of the accused banks and the commission had agreed to cancel formal hearings so that the regulator could have time to amend its complaint.
However, competition commissioner Thembinkosi Bonakele later said Standard Bank misunderstood what happened at the closed hearing.
It’s an error “There’s no truth at all that we may withdraw any allegations against any banks,” Bonakele said. “It’s an error. It doesn’t mean we’ll never press any new charges against any other banks.”
Some lenders said in the papers filed in May that South Africa’s antitrust authority has no jurisdiction, because there is no evidence the trades happened inside the country or had any effect on the economy.
The commission was asked by the Competition 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 the rand, it would have impacted the country, according to one of the people.
JPMorgan Chase, Credit Suisse Group, HSBC Holdings, Nomura International and Commerzbank declined to comment.