Neelam Rahim | neelam@radioislam.co.za

3-minute read
23 November 2023 | 20:28 CAT

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There is a sense of outrage at the settlement agreement reached between Standard Chartered Bank and the Competition Tribunal of R42.7 million for currency manipulation.

The currency manipulation saga started in May 2015, when the Commission alleged that banks conspired to raise the value of the rand against the dollar. The inquiry followed a global probe into currency manipulation that was exposed two years earlier, triggering investigations in the US and the UK and resulting in billions of dollars in settlements.

The Competition Commission said Standard Chartered had also divided markets by allocating customers in which one trader withholds or pulls an existing bid or offer from the market to allow another trader to execute and complete a separate trade.

“The commission welcomes [Standard Chartered’s] decision to reach a settlement on this matter and encourages other respondent banks to consider settling the complaint against them,” Competition Commissioner Doris Tshepe said in the statement. “This settlement affirms the commission’s pursuit of allegations related to the manipulation of the USD/ZAR currency pair, given the ultimate impact of the currency manipulation on the value of the South African rand.”

Meanwhile, Public Interest South Africa’s Tebogo Khaas says it is underwhelmed by the settlement agreement.

“Public Interest SA is underwhelmed by the Competition Tribunal’s ratification of a settlement agreement between the Competition Commission of South Africa and Standard Chartered Bank (SCB), marking a significant development in addressing the 2015 currency manipulation complaint against the bank.”

“The complaint also implicated other financial institutions who need to be held account for the participating in an activity that has sought to put this economy in doldrums,” said Khaas.

Public Interest SA acknowledges Standard Chartered Bank’s admission of guilt, its commitment to full cooperation with the Commission in prosecuting other participants, and its agreement to pay the administrative penalty. However, Public Interest SA expresses concern that the penalty appears insufficient given the severity of the criminal conduct and its enduring adverse impact on the economy.

“While the penalty constitutes 10% of SCB’s annual turnover for the financial year ending 31 December 2019, Public Interest SA emphasises the potential for the negative impact on the South African economy to, arguably, extend into trillions of ZAR in the next decade. Public Interest SA advocates that competition authorities should have pursued punitive damages against SCB and its co-conspirators,” the statement said.

Furthermore, Public Interest SA calls upon the Legislature to implement more robust consequences against errant financial institutions to the current provisions of Section 4(1)(b)(i) of the Act. This includes the consideration of personal fines against executives as a deterrent against economic crimes of this nature, which have lasting repercussions for the people of South Africa.

Listen to the full interview on Your World Today with Mufti Yusuf Moosagie.