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Nine companies refuse to be joined in bank forex trading case

Ernest Mabuza Journalist
All nine banking companies which the Competition Commission seeks to join in a complaint about allegedly manipulating the rand-dollar exchange rate have refused to be joined in the case. Stock photo.
All nine banking companies which the Competition Commission seeks to join in a complaint about allegedly manipulating the rand-dollar exchange rate have refused to be joined in the case. Stock photo.
Image: 123RF/PHONGPHAN SUPPHAKANKAMJON

No case has been made by the Competition Commission against either Nedbank Group Ltd or Nedbank Ltd in its complaint against various banks for allegedly colluding to fix prices and divide markets in respect of the rand-dollar exchange rate.

This was the submission made by Anthony Gotz SC, counsel for Nedbank Group Ltd and Nedbank Ltd, in opposing the application by the commission to join the holding company and the bank in its complaint, initially launched in 2015.

At the beginning of the hearings on Monday, counsel for the commission, Tembeka Ngcukaitobi SC, argued that the need to properly spend public funds called for the nine banks accused of manipulating the rand-dollar exchange rate to be joined in a case against 23 other banks that had already been charged by the commission.

Ngcukaitobi added that it would also be convenient for all banks facing the same charge to be in the same room to avoid a multiplicity of actions.

However, the nine banks opposed their proposed joinder in the case. They are HSBC Bank USA, Merrill Lynch Pierce Fenner & Smith Inc, Bank of America NA, Credit Suisse Securities (USA) LLC, Nedbank Group Ltd, Nedbank Ltd, FirstRand Ltd, FirstRand Bank Ltd and Standard Americas Inc. 

“There is no cause of action made out against either of the respondents. No prima facie case of action is made out against Nedbank Group.

“In the absence of any case that is made out against Nedbank Group, it is justifiable for Nedbank Group to say, ‘What am I doing here?’ It is entitled to object to the joinder on the basis that no case has been made out,” Gotz said.

Gotz said in the case of Nedbank Group Ltd, it was not a bank and was not an authorised foreign exchange dealer.

“By that fact alone it cannot be a participant in the act alleged by the applicants. It does not employ traders. On what basis does the commission say it must be cited as a respondent? Nedbank Group, at the very least, ought not to be joined in these proceedings,” Gotz said.

Likewise, Mark Wesley, advocate for FirstRand Ltd and FirstRand Bank Ltd, also opposed the joinder and said there were no allegations against FirstRand Ltd, a holding company of First Rand Bank Ltd.

Ngcukaitobi will reply to the banking companies when the tribunal resumes on Tuesday morning.

The conduct complained of was allegedly carried out via the exchange of competitively sensitive information on the electronic messaging platforms used for currency trading.

The commission said this enabled the banks to co-ordinate their trading activities when quoting customers who buy or sell currencies.

It said this co-ordination had the effect of eliminating competition among the banks, as it enabled them to charge an agreed price for a specific amount of currency.

TimesLIVE


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