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Competition Appeal Court says that for Nedbank, Standard Bank and FirstRand – and all but four of the foreign banks accused of rigging the rand – there is no case to answer. From Moneyweb.

For JPMorgan Chase, HSBC, BNP Paribas and Credit Suisse ‘sufficient facts were placed before the court’ for the matter to proceed to trial. Image: Bloomberg

Standard Bank has welcomed the Competition Appeal Court (CAC) decision to dismiss the case against it and all but a handful of the 28 banks accused by the Competition Commission of rigging the rand.

The case ignited a firestorm of political posturing late last year, with accusations from several parties that the banks were responsible, through manipulating the currency, for the dire economic conditions in the country.

Read: The government does not need the private sector to collapse state capacity

It now appears as if the commission’s case has hit the wall, notwithstanding Standard Chartered (the British bank) agreeing to settle the case and pay a fine of R42.7 million late last year.

Read: Standard Chartered settles forex rigging case after eight years in court

The case was dismissed against all SA banks appealing the case except Investec, which opted not to join the appeal lodged by the other banks.

The case was also dismissed against foreign banks except JPMorgan Chase, HSBC, BNP Paribas and Credit Suisse. The reasons for the dismissals varied from the court’s lack of proper jurisdiction over foreign banks, citing the incorrect legal entity, to lack of evidence.

Bank vindicated

Standard Bank has welcomed the decision: “The CAC handed down its judgment on 8 January 2024 which accepted the bank’s incontrovertible evidence over a period of seven years that it had not been party to an international conspiracy to manipulate trading in the USD/ZAR currency pair and consequently held that the Competition Commission’s complaint in that regard is dismissed.

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“Standard Bank has always maintained that the Group is wholly committed to the rule of law, respects the important role of institutions, and upholds South Africa’s Constitutional democracy, and our Constitutional obligation to ensure that our country improves the quality of life of all citizens.

“In its ruling, the Court concluded that the case against Standard Bank ‘does not get out of the legal starting blocks’.”

‘Flimsy evidence’

The banks were alleged to have been involved in a “single over-arching conspiracy” to fix the rand.

They key evidence presented by the commission was a series of 158 chats over seven years between traders in private online chatrooms.

In these chats, the traders were alleged to have conspired to make profits for themselves, reduce risk, and avoid losses when dealing in the ZAR/USD currency pair.

Legal representatives for the banks argued that these 158 chats over seven years constituted flimsy evidence of a single overarching conspiracy. These chats were often vague and, the banks contended, could not be tied to a single instance of alleged currency manipulation.

The Competition Commission has not yet issued a statement and told Moneyweb it is studying the judgment.

For the balance of the respondents – BNP Paribas, JPMorgan Chase, HSBC and Credit Suisse Securities – sufficient facts were placed before the court for the matter to proceed to trial, says the CAC ruling.