• Noakes soap opera

    How many millions more will be sunk into a seemingly pointless vendetta, asks Mandi Smallhorne.

  • Downgrade scenarios

    An analyst takes a look at how credit downgrades have affected countries around the world.

  • Supply chain benefits

    It may be unsexy but developing your supply chain brings big gains, says Ian Mann.

All data is delayed
Loading...
See More

Absa let off collusion fine as it helped regulators - source

Feb 17 2017 08:22
Franz Wild, Renee Bonorchis and Stephen Morris

Johannesburg - Citigroup and Barclays (which owns Absa) won’t be targeted for fines by the Competition Commission for colluding to manipulate the value of the rand because they co-operated with regulators, three people familiar with the matter said.

While they may not yet have full indemnity, their disclosures to the Competition Commission could save them from being penalised if the information they provided is proven correct, the people said, asking not to be identified because the matter is still confidential. The two banks have been working with the commission from an early stage, they said.

Citigroup and Barclays were named as part of the rand-rigging probe that started in 2015. The Competition Commission on Wednesday didn’t name Citigroup and didn’t add Barclays to the list of banks it recommended for fines.

The commission identified lenders including Bank of America Merrill Lynch, HSBC, BNP Paribas SA, Credit Suisse, JPMorgan and Nomura as among those that participated in price fixing and market allocation in the trading of foreign-currency pairs involving the rand. It referred the case to an antitrust tribunal.

Traders in New York and Johannesburg used the Reuters trading platform and Bloomberg chat-rooms to conspire to rig the rand’s rate, prosecutors will allege, according to one of the people. While the regulator will seek the maximum fines, banks that have cooperated are likely to be granted leniency, the person said.

Fictitious bids

“The respondents manipulated the price of bids and offers through agreements to refrain from trading and creating fictitious bids and offers at particular times,” the commission said on Wednesday.

“They assisted each other to reach the desired prices by coordinating trading times. They also created fictitious bids and offers, distorting demand and supply in order to achieve their profit motives.”

The prosecution should be shorter than most antitrust cases, due to the straightforward nature of the matter, one of the people said. Regulators aren’t seeking specific action against individual traders from the banks, but are likely to make demands to change incentives that encourage traders to push the boundaries, the same person said.

Other lenders named in the probe include Standard Bank, Investec, Standard Chartered, Commerzbank, Macquarie and Australia & New Zealand Banking Group.

South African President Jacob Zuma called for action against market abuse, while the National Treasury said reckless behaviour must be “punished and brought to an end.”

‘Unbridled greed’

“If proven to be true, it would confirm the pervasiveness of unbridled greed within the ranks of the forex trading sections of banks,” the Treasury said in an e-mailed statement.

Barclays Africa, about 50% owned by Barclays, said in an e-mailed statement on Wednesday it has cooperated with the commission and will continue to do so. Citigroup declined to comment in an e-mail on why it wasn’t on the list of banks facing a fine. London-based Barclays declined to comment.

The commission recommended the banks be fined 10% of their turnover, the maximum allowed.

Read Fin24's top stories trending on Twitter:

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest. 24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

absa  |  barclays  |  collusion  |  currencies  |  rand  |  forex  |  banks  |  price fixing

NEXT ON FIN24X

 
 
 
 

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Almost all working South Africans fear losing their jobs

Previous results · Suggest a vote

Loading...