Jurisdiction on fining foreign banks for colluding: tribunal rescinds its findings
THE COMPETITION commission on Friday said that the Competition Appeal Court has set aside an earlier finding that there was no jurisdiction to fine international banks if they were found guilty of colluding on forex trading in the rand/dollar case.
The tribunal had ruled last year that if the commission was successful in its case against the international banks implicated in the matter, they could be ruled anti-competitive but would not face a financial penalty.
The banks, including Merrill Lynch, Credit Suisse and JP Morgan, however, appealed that ruling, contending the local authorities had no jurisdiction to issue any order against them, including one of anti-competitive conduct.
The commission also challenged the order on different grounds, and on Friday, the Cape Town-based court found in its favour, holding that the banks could be fined if the investigation yielded evidence against them.
The commission is seeking an order that the banks breached the Competition Act and be fined 10 percent of their annual turnover.
The court also dismissed an application by Investec to declare the investigation vexatious and unreasonable.
The investigation targets 23 banks, which include local banks, foreign banks with a presence in South Africa, and foreign banks with no presence in the country, for allegedly rigging the rand/dollar trading prices, using electronic chat-rooms to collude with competitors.
The tribunal alleges as far back as 2007, the banks manipulated the price of bids and offers by, among others, creating fictitious bids and making agreements to refrain from trading at certain times. “They assisted each other to reach the desired prices by co-ordinating trading times.
“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,” it said.
The commission said though it filed papers against the banks in February 2017, only one, HSBC, had filed responding papers on the merits of the case. It is disputing participating in the alleged manipulation.
African New Agency (ANA)