Ju­ris­dic­tion on fin­ing for­eign banks for col­lud­ing: tri­bunal re­scinds its find­ings

Pretoria News - - BR - |

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)

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