Rand manipulation case was ‘political huff and puff’ – professor

The rand manipulation case against some of South Africa’s biggest banks and their international counterparts was made a political issue instead of being about ensuring financial regulations were applied, and bad actors held to account. 

This is feedback from Professor at Wits’ School of Governance, Alex van den Heever, who told the SABC that there are major concerns surrounding the Competition Commission’s failure to meet the evidentiary threshold set by the Competition Appeals Court (CAC). 

The CAC handed down a judgement on Monday, 8 January, dismissing the Competition Commission’s eight-year case against three big South African banks and most of the foreign banks implicated in the probe. 

The ruling, therefore, dismissed the claims against Standard Bank, Nedbank, and FirstRand.

This leaves just Investec and the four foreign banks whose traders pleaded guilty to charges brought by the US Department of Justice years ago.

Investec remains in the case because it did not join the application to the CAC to prevent the case from going ahead.

The CAC dismissed the charges against some of the banks and financial institutions for various reasons.

This included a lack of jurisdiction to prosecute some of the international banks and an incorrect attempt to prosecute holding companies not involved in the alleged trades. 

In addition, some charges were dismissed for lack of evidence, with the court stating the commission should have been more thorough in setting out its case.

Wits professor Alex van den Heever

“The concern that I have is that it was made a political issue in which banks were attached as forming part of a systematic attack on South Africa. That was completely uncalled for, and the National Treasury made clear that it was not the case,” Van den Heever said. 

Van den Heever was referring to comments made by Minister Khumbudzo Ntshavheni in light of Standard Chartered Bank being fined R43 million for manipulating the value of the rand against the US dollar. 

Ntshavheni said that the government has maintained “that the performance of the rand and sometimes the performance of the economy has been manipulated by the private sector who has no interest in the development of this country”. 

“They continue to engineer and do machinations to make sure that the government collapses.”

“That’s why they also self-feed in the narrative that there’s a collapsing state and a collapsing economy because that’s what they wish for, and their actions do that.”

However, she said the South African economy remains resilient despite the private sector’s efforts. 

“The fact that we had this political huff and puff instead of getting one with the work of actually regulating is a concern to me because people had not done their work, and we need regulatory authorities with the capacity to do this work,” Van den Heever said. 

“Are they able to do it in cases where people have not been basically fingered by US authorities? That is, to me, a concern.”

He added that there was manipulation of the rand, as Standard Chartered admitted, but the Competition Commission failed to build a proper case. 

“Whether or not there has been systematic manipulation of the rand has not been shown by the Competition Commission. If there was such manipulation, then they should have been able to investigate it and prove it.”

“This means that manipulation and financial irregularities can continue because our array of financial regulators cannot address this issue in a competent manner that addresses problematic behaviour,” he added.