‘DAY­LIGHT ROB­BERY’

Out­cry over ‘bank heist on the poor’

The Star Late Edition - - FRONT PAGE - LUY­OLO MKEN­TANE luy­olo.mken­tane@inl.co.za

PO­LIT­I­CAL par­ties have de­cried the col­lu­sion claims against 17 in­ter­na­tional banks, in­clud­ing Stan­dard Bank, Absa and in­vestec, de­scrib­ing the crimes as a “big em­bar­rass­ment” and “day­light rob­bery” against the poor ma­jor­ity in the coun­try.

How­ever, the tim­ing of the re­lease of the Com­pe­ti­tion Com­mis­sion’s ex­plo­sive find­ings on the price has been de­scribed as awk­ward and sus­pi­cious by some in­dus­try stake­hold­ers.

Yes­ter­day, the com­mis­sion an­nounced it had re­ferred the col­lu­sion mat­ter to its tri­bunal for pros­e­cu­tion. It had found that from 2007 the com­mer­cial banks had a “gen­eral agree­ment to col­lude on prices for bids, of­fers and bid-of­fer spreads for the spot trades in re­la­tion to cur­rency trad­ing in­volv­ing dol­lar cur­rency pairs”.

The banks in­cluded Bank of Amer­ica Mer­rill Lynch In­ter­na­tional, BNP Paribas, JP­Mor­gan Chase, In­vestec, Stan­dard New York Se­cu­ri­ties, HSBC Bank, Stan­dard Char­tered Bank, Credit Suisse Group, Stan­dard Bank of South Africa, Com­merzbank, ANZ, No­mura In­ter­na­tional, Mac­quarie Bank, Absa Bank, Bar­clays Cap­i­tal and Bar­clays Bank.

“They reached agree­ments to re­frain from trad­ing, tak­ing turns in trans­act­ing and by ei­ther pulling or hold­ing trad­ing ac­tiv­i­ties on the Reuters cur­rency trad­ing plat­form. They also cre­ated fic­ti­tious bids and of­fers, dis­tort­ing de­mand and sup­ply in or­der to achieve their profit mo­tives,” the com­mis­sion said.

The banks were li­able for the pay­ment of an ad­min­is­tra­tive penalty “equal to 10% of their an­nual turnover”, and com­mis­sioner Tem- binkosi Bon­akele said re­fer­ring the mat­ter to the tri­bunal would af­ford the banks an op­por­tu­nity to “an­swer for them­selves”.

ANC spokesper­son Zizi Kodwa said the mat­ter must be treated as a crime and that cor­rup­tion in the pri­vate sec­tor was no longer a per­cep­tion but a re­al­ity, which im­peded the rad­i­cal trans­for­ma­tion of the econ­omy. “The find­ings of the com­mis­sion (put into ques­tion) the cred­i­bil­ity, trust and in­de­pen­dence of these in­sti­tu­tions and whether they can still be trusted to act in­de­pen­dently,” he told The Star.

“This is a heist by the banks against poor peo­ple in South Africa. We must thank the com­mis­sion for hav­ing made these rev­e­la­tions. There must be a con­certed ef­fort to deal with cor­rup­tion in the pri­vate sec­tor,” Kodwa added.

He said the find­ings came on the heels of the “big scan­dal by Absa” per­tain­ing to the apartheid-era bailout. “We need an al­ter­na­tive if we re­ally want to im­ple­ment rad­i­cal eco­nomic trans­for­ma­tion. We must change these in­sti­tu­tions and their own­er­ships. This is an em­bar­rass­ment, it’s scan­dalous.”

Econ­o­mist Dawie Roodt said the com­mis­sion’s tim­ing on the mat­ter was “a lit­tle bit awk­ward for me” as it came a few days af­ter the ANC Youth League had marched to the Absa head­quar­ters in cen­tral Joburg, de­mand­ing that it pay back the money.

The march fol­lowed the re­lease of the pub­lic pro­tec­tor’s re­port that Absa ben­e­fited from an apartheid-era bailout to the tune of R2bn.

Roodt said the prob­lem with the coun­try’s fi­nan­cial sec­tor was it didn’t have enough com­pe­ti­tion and it was dif­fi­cult to ob­tain a trad­ing li­cence.

He said the pub­lic would prob­a­bly never know what hap­pened re­gard­ing the col­lu­sion scan­dal. “What’s prob­a­bly go­ing to hap­pen is that the banks will even­tu­ally pay some ad­mis­sion of guilt. Let the case be heard in an open court, and if they are found guilty, they should be fined and given a crim­i­nal record,” he said.

When asked what lessons could be learnt, Roodt said: “It is this: we don’t need stricter reg­u­la­tions in the fi­nan­cial sec­tor. There should be fewer reg­u­la­tions and more par­tic­i­pants. It would make it dif­fi­cult to ma­nip­u­late prices if there were quite a num­ber of play­ers.”

DA spokesper­son on eco­nomic devel­op­ment Michael Cardo said the party took note of the re­fer­ral of the mat­ter to the Com­pe­ti­tion Tri­bunal and would wait for the law to take its course. “But the tim­ing of the an­nounce­ment does seem a lit­tle sus­pi­cious, com­ing hot on the heels of Zuma’s State of the Na­tion Ad­dress, in which he made it clear that the com­pe­ti­tion au­thor­i­ties would be used as one of the main tools of ‘rad­i­cal eco­nomic trans­for­ma­tion’.”

United Demo­cratic Move­ment leader Bantu Holomisa said: “The com­mis­sion has a rep­u­ta­tion of not be­ing wrong in its find­ings, so it’s go­ing to be dif­fi­cult for those banks to con­vince us oth­er­wise.”

MON­TAGE: ELVIN NETHONONDA EX­PLO­SIVE RE­PORT: The Com­pe­ti­tion Com­mis­sion has found that from 2007, a num­ber of in­ter­na­tional banks had a gen­eral agree­ment to col­lude on prices for bids, of­fers and bid-of­fer spreads for spot trades re­lat­ing to cur­rency trad­ing.

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