JOHANNESBURG, February 15 (ANA) – The Competition Commission on Wednesday referred a collusion case to the Competition Tribunal for prosecution against 16 major banks, including South Africa’s Absa, Investec and Standard Bank.
The Commission said it had been investigating a case of price fixing and market allocation in the trading of foreign currency pairs involving the rand since April 2015.
The banks are: Bank of America Merrill Lynch International Limited, BNP Paribas, JP Morgan Chase and Co, JP Morgan Chase Bank N.A, 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.
The Commission said it found that from at least 2007, the banks had a general agreement to collude on prices for bids, offers and bid-offer spreads for the spot trades in relation to currency trading involving US Dollar/Rand currency pair.
The Commission also found that the banks manipulated the price of bids and offers through agreements to refrain from trading and creating fictitious bids and offers at particular times.
According to the Commission, traders of the banks primarily used trading platforms such as the Reuters currency trading platform to carry out their collusive activities.
They also used Bloomberg instant messaging system, or chatroom, telephone conversation and had meetings to coordinate their bilateral and multilateral collusive trading activities, the Commission said.
They assisted each other to reach the desired prices by coordinating trading times.
They reached agreements to refrain from trading, taking turns in transacting and by either pulling or holding trading activities on the Reuters currency trading platform.
They also created fictitious bids and offers, distorting demand and supply in order to achieve their profit motives.
The Commission is now seeking an order from the Tribunal declaring that the respondents have contravened the Competition Act.
Further, the Commission also seeks an order declaring that the banks are liable for the payment of an administrative penalty equal to 10 percent of their annual turnover.
“The referral of this matter to the Tribunal marks a key milestone in this case as it now affords the banks an opportunity to answer for themselves,” Commissioner Tembinkosi Bonakele said in a statement.
– African News Agency (ANA)
