It still sounds too good to be true, but the times where the SA Banks work together as an illegal cartel to fill their pockets on account of the consumers might be over and those Executive and Non-Executive Directors involved without a job!
The Competition Tribunal still needs to establish whether the manipulation of foreign-currency trades was done by rogue traders or whether it was more widespread at the 17 banks identified by the Competition Commission on Wednesday. “We need to establish if it’s a rogue trader or if this more widespread,” said Rassou. “This could result in fines, but the Reserve Bank will ensure that it doesn’t cause disruption in our capital markets.” Asief Mohamed, chief investment officer at Cape Town-based Aeon Investment Management, said earnings and reputations could be at stake.
“Collusive practices must lead to consequences such as termination of the services of key management, executive and non-executive directors,” said Mohamed. “The banks, if guilty, will most likely be fined and will have a negative impact on earnings and reputation.” Investec said it will cooperate with authorities, but was unable to comment further because it didn’t have details of their investigations. Barclays Africa Group (which owns Absa) also said it will cooperate with the authorities, while noting that the regulator had not sought penalties against it. Credit Suisse said it is looking into the matter.
Bank of America, JPMorgan, Standard Chartered, Commerzbank, Macquarie., Australia & New Zealand Banking, Standard Bank, HSBC and BNP declined to comment when contacted by Bloomberg.
h3. Banks manipulated the Price of Bids and Offers
On Wednesday, the Competition Commission recommended some of them be fined 10% of their annual turnover after concluding an investigation that began in 2015. “The respondents manipulated the price of bids and offers through agreements to refrain from trading and creating fictitious bids and offers at particular times,” the Competition Commission said. “They assisted each other to reach the desired prices by coordinating trading times. They also created fictitious bids and offers, distorting demand and supply in order to achieve their profit motives.”
The outcome of the investigation comes as President Jacob Zuma and his governing African National Congress step up pressure to break the dominance of South Africa’s largest lenders and improve access to the economy that still alludes many of the country’s black majority almost 23 years since the end of apartheid.
South Africa’s efforts to better regulate foreign-exchange trading follows a price-rigging scandal in which some of the world’s largest banks agreed to pay fines and plead guilty to conspiring to manipulate markets after being accused of using online chat rooms to collude.
South Africa’s central bank said it viewed the allegations as a serious matter and would allow proceedings to run their course. The tribunal will now notify the banks of the complaint and ask them to respond, Chantelle Benjamin, a spokesperson for the body, said by phone. The banks will then file statements and attend a preliminary meeting to set a date for a full hearing, she said.
The commission has previously uncovered collusion in the country’s bread and flour industry, among cement producers and by construction companies that bid to build stadiums for the 2010 soccer World Cup. Those involved were forced to pay hefty fines.
For once we side with the ANC: “Punish the Banks”, as they are the main culprits holding the economy back through restrictive lending policies and exorbitant banking fees!!!