Silent Scandal: Urgent Call for [Louder] Outrage and Consequences Amidst Allegations of Rand Manipulation by South African Banks

In a groundbreaking decision, the Competition Tribunal has dealt a severe blow to major South African banks, including Investec, Standard Bank, and Absa, rejecting their attempts to escape prosecution in an ongoing case involving alleged currency manipulation. The case, known as the “Forex Cartel,” revolves around accusations of price fixing related to the rand/dollar currency pair and has profound implications for the South African economy.

Initiated by the Competition Commission in February 2017, the investigation implicated 28 banks in a general agreement to collude on prices for bids, offers, and bid-offer spreads in currency trading involving the rand. The manipulation, dating back to at least 2007, significantly impacted the exchange rate of the South African Rand, causing widespread repercussions across various sectors, including imports and exports, foreign direct investment, public and private debt, and company balance sheets. The resultant effects rippled through the prices of goods and services, as well as financial assets.

The recent Tribunal decision, dismissing objections from 15 banks, underscores the gravity of the alleged conduct. The accused banks, including Standard Bank, Nedbank, and FirstRand Bank, sought to halt prosecutions on various grounds, such as jurisdiction. However, the Tribunal not only rejected these claims but also affirmed its authority to hear the case.

The Competition Commission welcomed the ruling as a significant setback for the accused banks. This follows a related decision by the Competition Appeal Court (CAC), which denied Standard Bank access to the Commission’s evidence until it responds to the allegations.

The Tribunal stressed the seriousness of the accusations, stating, “The respondents are accused of engaging in conduct considered the most egregious in competition law. Furthermore, the alleged conduct relates to fixing and manipulating the Rand/Dollar exchange rate, which has a central and crucial role in the South African economy.”

Despite the gravity of the situation, the public response to the revelations has been relatively muted, especially from sectors that typically raise their voices against corruption allegations. This selective rage raises concerns about the consistency of public outrage and the collective demand for accountability.

What is often overlooked is the potential impact on ordinary citizens and small businesses. Currency manipulation, as alleged in this case, could have significantly affected the daily lives of ordinary South Africans. Import and export prices, directly linked to currency exchange rates, likely experienced distortions, impacting the cost of goods and services for consumers. Small businesses, already vulnerable in a competitive market, may have faced increased challenges due to unpredictable and manipulated exchange rates affecting their import costs and profit margins.

The banks involved must not escape scrutiny, especially considering their evasion of the allegations since 2017. This raises questions about their commitment to transparency and accountability. The Tribunal’s decision now provides an opportunity for the accused banks to respond to the allegations, and the public should demand nothing less than a thorough examination of the charges.

Moreover, the possibility of criminal charges against those responsible for the currency manipulation should not be dismissed. The severity of the alleged conduct warrants a comprehensive legal inquiry. The Competition Commissioner, Doris Tshepe, rightly asserts, “The decision by the Tribunal affirms the commission’s view that there is collusion that the banks must answer to.” Criminal charges, if proven, would send a clear message that such behavior will not be tolerated and will be met with severe consequences.

In conclusion, the ongoing case against South Africa’s big banks for currency manipulation is a critical moment for the nation. The public, particularly those sectors known for their vocal stance on corruption allegations, must recognize the far-reaching implications of this misconduct and demand justice. The impact on ordinary citizens and small businesses should not be underestimated, and it is crucial for the public to express their outrage and ensure accountability for those found guilty. Only through widespread public engagement can South Africa ensure that such egregious behavior is not repeated in the future.