The decade-long battle by the Competition Commission to take local and international banks to trial over the manipulation of the rand against the US dollar, is now in the hands of the justices of the Constitutional Court after the court reserved judgment in the matter on Thursday.

Some of the country’s top senior advocates argued over three days in the appeal application brought by the commission against the majority of the findings made by the Competition Appeal Court (CAC) last year. This is especially against the CAC’s findings that the commission did not have jurisdiction over the majority of the international banks.

The arguments, spanning over three days, which were of a highly technical nature and dealt with the Competition Act, ended a day earlier than expected.

This was also the first time that newly appointed Deputy Judge President Dunstan Mlambo sat on the Concourt bench in this capacity.

Advocate Tembeka Ngcukaitobi, acting on behalf of the Competition Commission, argued that there is enough evidence to establish a prima facie case that the banks, which were let off the hook by the CAC, were involved in the manipulation of the rand.

He said they had a case to answer when the matter later went on trial before the Tribunal.

An important issue which served before the court is the extent of the commission’s jurisdiction over foreign banks alleged to have colluded in a single overarching conspiracy (SOC) and which do not have ties with South Africa. 

It is alleged that these banks, together with local banks, which include Standard Bank, Nedbank and First Rand Bank, have conspired to manipulate the exchange rate in respect of the US dollar and the rand. 

The commission, however, did not link FirstRand and Nedbank to the chatroom, where the commission claimed agents of the various banks shared trade secrets and planned to manipulate the rand against the dollar.

These local banks, as well as Standard Bank, vigorously argued that there is nothing linking them to the fixing of the rand. 

The commission, meanwhile, argued that its terms permit enforcement action even against banks with no presence or business in South Africa (a peregrinus).

Ngcukaitobi stressed that the effects of the alleged rand fixing were felt within the Republic. 

The arguments presented on behalf of the international banks, apart from denying that the commission had jurisdiction over them, also included that there is no evidence linking them to an international cartel.

In asking the court to overturn the finding by the CAC that the majority of the banks do not have a case to answer to, Ngcukaitobi argued that they were all aware, or should have reasonably been aware, that their agents colluded in chatrooms to manipulate the rand/dollar exchange.

He argued at length how the conversations in the chatrooms were conducted in an open manner and those who did not directly take part, knew about the activities.

He said the subsequent market trends were also indicative of a collusion.

According to him, the alleged price fixing affected South Africa directly, thus those implicated should face justice here, as South Africa is the only country taking the matter further.

He also told the court that the SA consumers are still feeling the effect of the fixing of the rand.

In June 2020, the commission had referred the case regarding the alleged rand fixing against 28 local and foreign banks to the Competition Tribunal.

The 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 released 17 banks from the complaint referral before they answered the allegations against them and restricted the commission’s case to only a handful of banks.

zelda.venter@inl.co.za

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