Published: 9 mins ago

The Constitutional Court will hear the Competition Commission's bid to overturn a ruling that cleared major banks of wrongdoing in a decade-long rand manipulation case. The proceedings are scheduled from Tuesday, 19 August, to Friday, 22 August.

A key issue for determination is whether the Competition Commission has jurisdiction over the foreign banks implicated in the alleged conspiracy. The commission initially launched its case in 2015 against 28 banks, including major local banks and a number of international institutions, alleging collusion to fix the foreign exchange rate between the US Dollar and the South African Rand.

The allegations against the banks include colluding on the USD/ZAR currency pair by fixing bids, offers, bid-offer spreads, and the spot exchange rate, as well as manipulating the rate at the FIX. The commission also accused the banks of dividing markets by allocating customers and coordinating trading activities, exhibiting cartel behaviour, and taking turns to buy or sell currencies without interference from each other.

The matter has moved back and forth between the Competition Commission, the Tribunal, and the Appeal Court between 2015 and 2020, with jurisdiction remaining a major sticking point. In 2023, the Competition Tribunal ordered the banks to file answering affidavits responding to the allegations. Rather than complying, the banks appealed to the Competition Appeal Court (CAC) in 2024, which largely upheld their appeal.

The CAC criticised the commission's case for being vague, contradictory, and conflating trader conduct across multiple entities. It also highlighted gaps, including instances where alleged misconduct occurred before traders were employed by the implicated banks. The CAC's ruling effectively cleared most of the banks, leaving only four cases—related to BNP Paribas, JP Morgan Chase, Credit Suisse Securities, and HSBC Bank Plc—to be answered.

The Competition Commission has now applied for leave to appeal to the Constitutional Court, seeking to reinstate claims against the remaining banks. The commission argues that deficiencies in its case can be addressed in a full trial and maintains that a prima facie case exists requiring the banks to respond.

Meanwhile, the banks continue to deny wrongdoing and are urging the Constitutional Court to dismiss the case, with some, including Standard Bank and FirstRand, citing reputational and financial harm resulting from the commission's claims. The Constitutional Court's ruling will determine whether the Competition Commission can once again pursue all 28 banks initially implicated in the investigation.
- online

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