Advocate Tembeka Ngcukaitobi argued there is enough evidence to establish a prima facie case of rand manipulation.
The Competition Commission on Tuesday told the Constitutional Court (ConCourt) there is evidence that several banks colluded to manipulate the South African rand.
Over the next four days, the ConCourt is set to hear arguments in a leave to appeal application brought by the commission after it lost in the Competition Appeal Court (CAC) in January 2024.
The case dates back to 2017, when the commission referred a complaint against 28 local and international banks to the Competition Tribunal.
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The complaint alleged that, between 2007 and 2013, banks manipulated the foreign exchange rate between the US dollar and the rand by sharing sensitive information through messaging platforms.
Two banks – Citibank and Standard Chartered – have already admitted their involvement, paying fines in 2017 and 2023 respectively.
Thirteen banks remain in the appeal case, including JP Morgan Chase Bank, HSBC Bank, FirstRand Bank, Nedbank, Standard Bank, and Bank of America.
Competition Commission likens rand manipulation saga to cartels
On Tuesday, Advocate Tembeka Ngcukaitobi, representing the Competition Commission, argued that the CAC erred in finding that there was a lack of evidence and the commission had no jurisdiction over the foreign banks.
The lawyer explained that competition authorities often find it straightforward to prosecute firms accused of cartel or collusive conduct because such agreements are usually clear.
However, he told the ConCourt that the rand manipulation case represents a classic example of the evolution of cartels.
Ngcukaitobi contended that cartels have evolved, becoming bigger, more sophisticated and transnational.
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“Not only do the cartels not respect territorial borders or nationalities, they also do not respect any product in pursuit of profits.
“The courts would have read many cases of cartels… people are fixing the price of the selling of oranges or the selling of bananas. There are many judgments like that in the European Court of Justice.”
He stressed that this case is “something unique”, as the banks allegedly targeted South Africa’s sovereignty in what he called a “perverse scheme driven by profit motives”.
“For this reason alone, the judicial institutions of South Africa are the only institutions across the world that have a legal interest in the prosecution of this cartel; at the heart of it is the rand.”
Prima facie evidence
Ngcukaitobi also argued that the CAC had already found there was enough evidence to establish a prima facie case of rand manipulation.
“The finding of the CAC is that the pleading contains enough evidence that the rand was manipulated, but it attributes that conduct to four banks and not the 27 that were initially cited.”
He further pointed out that some of the same individuals accused in South Africa had already been convicted abroad.
“The CAC was not the only court that found enough evidence to show a prima facie case of the manipulation of the rand.
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“The authorities of the United States have convicted traders… the same players who are prolific here of the same offence of manipulating the exchange rate involving the rand and the dollar.”
While acknowledging that some issues will still need to be tested at trial, Ngcukaitobi said the commission is asking the ConCourt to endorse some of the CAC’s findings – particularly that there was a single overarching conspiracy involving several banks to manipulate the rand.
“We also bear in mind that you will be following what other jurisdictions have already done to enforce competition laws in the prosecution of cartel activity which involves the manipulation of the rand and the dollar.”
