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SA Banks Say They Will Co-operate With Competition Commission Over Price-Fixing Claims

Nafcoc says it shows the need for a black-owned bank.

16/02/2017 15:17 SAST | Updated 16/02/2017 16:42 SAST
GIANLUIGI GUERCIA/AFP/Getty Images
ABSA is one of the banks implicated.

Two South African banks implicated in the alleged manipulation in foreign currency trading have committed to co-operating with the Competition Tribunal. Absa, Standard Bank and Investec are among the 17 banks that have been referred for prosecution for their role in the alleged price-fixing scandal.

Despite this, Absa was quick to point out that the Competition Commission had not sought penalties against it.

"Following the decision of the South African Competition Commission to refer several banks including Absa Bank to the Competition Tribunal, Absa will continue to co-operate with the Commission during the prosecution of this matter. It should be noted that the Competition Commission has not sought any penalties against Absa," the bank said in a statement.

Standard Bank spokesperson Erik Larsen said they would also work with authorities but would not comment further on the matter until the process was finalised.

"We will engage fully with the relevant authorities in relation to this serious matter but cannot comment further while the Competition Tribunal process continues," he said.

The Competition Commission is investigating a case of collusion and market allocation in the trading of foreign currency pairs involving the rand since April 2015.

The commission said it had discovered that the banks had agreed to collude on prices for deals for spot trades on trading involving US dollar/rand pairings.

"The banks are Bank of America Merrill Lynch International Limited, BNP Paribas, JP Morgan Chase & Co, JP Morgan Chase Bank NA, Investec Ltd, Standard New York Securities Inc, HSBC Bank Plc, Standard Chartered Bank, Credit Suisse Group; Standard Bank of South Africa Ltd, Commerzbank AG; Australia and New Zealand Banking Group Limited, Nomura International Plc, Macquarie Bank Limited, ABSA Bank Limited (ABSA), Barclays Capital Inc, Barclays Bank plc (Respondents)", said the commission in a statement.

The allegations have prompted the National African Federation of Chamber of Commerce and Industry (Nafcoc) to call for the creation of a black-owned bank. Nafcoc said it was becoming clear that the concentration and oligopolistic nature of sectors like construction and banking were proving to be a risk for the growth and development of the economy.

The organisation said there was a need for a fundamental transformation of the banking sector if South Africa was to maintain its status and image of being one of the top countries in terms of banking sector and regulation.

"Nafcoc's view is that not only should its ownership and management be broadened, but there must be measures to accelerate and increase inclusion of blacks and SMME sectors. One of the key objectives of Nafcoc has made a call for the establishment of the black-owned bank. We would like to renew this call and will be engaging the relevant authorities in this regard" said Nafcoc president said Lawrence Mavundla.