South Africa

Competition watchdog takes big banks to Constitutional Court

The Competition Commission has approached the Constitutional Court for leave to appeal the ruling that dismisses its case against local and international banks for allegedly conspiring to manipulate the rand.

This move comes after the Competition Appeal Court (CAC) threw out the Commission’s case against 23 of 28 banks earlier this year.

The CAC dismissed the case because the Commission did not provide sufficient evidence to prove a “single overall conspiracy”.

The Commission accused the banks of colluding to fix the rand-dollar foreign exchange rate.

“In its current application for leave to appeal, the Commission is appealing the Competition Appeal Court order to the ConCourt against 13 respondent banks,” it stated.

These include local institutions Standard Bank, Nedbank, and FirstRand Bank.

It also includes ten international banks, including the Bank of America, JP Morgan Chase, and HSBC Bank.

“The Commission will not appeal the CAC order in respect of the Nedbank Group Limited, FirstRand Limited, Credit Suisse Group, and Standard New York Securities Inc.,” the Commission said.

“The Commission will also not appeal the CAC order that dismissed the appeals of these four respondent banks: BNP Paribas, JP Morgan Chase and Co, HSBC Bank plc, and Credit Suisse Securities (USA) LLC.”

Commissioner Doris Tshepe said this appeal will give the ConCourt the opportunity to pronounce whether South African competition authorities have jurisdiction to investigate and prosecute firms that are based outside of the country whose anti-competitive conduct affects the country’s economy.

The Commission said Absa Bank Limited, Barclays Capital Inc., and Barclays Bank plc applied for leniency, while Citibank N.A. and Standard Chartered Bank have settled out of court.

“Investec Limited and Investec Bank Limited remain respondent banks required to file answering affidavits,” it stated.

The Commission’s case against the banks has been ongoing in some capacity since 2015.

In April 2015, the Commission initiated a complaint against various financial entities centred on allegations of price-fixing and market division in the trading of the USD/ZAR currency pair. 

The anti-competitive practices are alleged to have taken place between September 2007 to at least September 2013. 

In August 2016, the Commission amended the complaint, adding additional financial institutions and including allegations of market allocation through customer allocation against the financial institutions. 

The Commission subsequently referred the complaint to the Competition Tribunal in February 2017. 

The respondent banks took exception to the original referral. 

Those objections were adjudicated by the Tribunal in 2019 and considered again on appeal before the CAC in 2020.

There, the CAC ordered that the Commission file a new referral affidavit to substitute for and replace all the complaint referral affidavits, which the Commission did in June 2020.

The respondent banks were ordered by the Tribunal in March 2023 to file their answering affidavits in response to the Commission’s complaint referral but objected to the Tribunal order and appealed it to the CAC.

The CAC delivered its judgment in January 2024 and ordered four of the 21 respondent banks to file, within 40 days, their answering affidavits with the Tribunal. 

The CAC also upheld the appeal by 17 respondent banks, which sought a CAC order to set aside the March 2023 Tribunal decision.

The four respondent banks ordered by the CAC to file their answering affidavits are BNP Paribas, JP Morgan Chase and Co, HSBC Bank Plc, and Credit Suisse Securities (USA) LLC. 


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