‘No political interference in probe’

THE COMPETITION Commission has denied any political interference by the government in its investigations into currency manipulation by the banks.

Competition Commission head Tembinkosi Bonakele told the portfolio committee on economic development yesterday their investigation was above board.

He said it started in April 2015 after the US and UK authorities had fined several banks a combined $5.6 billion (R74bn) for collusion and price fixing.

DA MP Michael Cardo said he was concerned about the timing of the investigation into the collusion of the banks in currency trading.

Among 17 banks investigated by the commission were three local banks: Absa, Investec and Standard Bank.

Cardo wanted to know whether there were political considerations in the investigation.

However, ANC MPs said the commission was an independent institution carrying out its constitutional mandate. Chairperson of the committee Busi Coleman said it backed the commission in its work.

She said this was a complex investigation involving international players in currency trading. Coleman said the committee had full confidence in the Competition Commission.

Bonakele denied there were political considerations in the investigations. He said this started in April 2015, and they were gathering information from partners overseas.

“Were there political considerations in the investigation? Absolutely not, we don’t do that,” said Bonakele.

“This was a complex investigation. We had an idea by the end of last year that we will press charges against the banks,” he said.

It was last week that they referred the matter to the Competition Tribunal for prosecution.

Bonakele said the government had not interfered in the commission’s work. He agreed with MPs that the R69.5m fine imposed on Citibank was low. He said this was 4% of its annual turnover in South Africa. Citibank was a small player in the local market.

“The prosecutor sometimes will have to make this call because we have a bigger case to run. It was important we have witnesses who are with us. There are compromises you have to make to move forward,” he said.

Citibank would help the competition authorities to testify against other banks in the manipulation of the currency.

“We will go for maximum penalty to deter the conduct. We do not have any other settlements at the moment. There are no discussions with other banks on the settlements,” said Bonakele.

He was unable to comment on the impact of currency manipulation on South Africa. The commission had not done a study on the effect in the country. He said the rand was one of the most traded currencies in the world. Nearly 70% was traded outside the country.

“The purpose of this collusion was to affect the value of the currencies, more particularly the rand,” he said.