FOR IMMEDIATE RELEASE
PUBLIC INTEREST SA UNDERWHELMED BY COMPETITION TRIBUNAL’S RATIFICATION OF A SETTLEMENT AGREEMENT WITH STANDARD CHARTERED BANK
Johannesburg, South Africa, Sunday, 19 November 2023 – Public Interest SA is underwhelmed by the Competition Tribunal’s ratification of a settlement agreement between the Competition Commission of South Africa and Standard Chartered Bank (SCB), marking a significant development in addressing the 2015 currency manipulation complaint against the bank.
The settlement requires Standard Chartered Bank to pay an administrative penalty of approximately R43 million, resolving allegations of engaging in a concerted practice to manipulate prices in relation to bids, offers, and bid-offer spreads concerning spot trades, forward trades, and future trades involving the South African currency (ZAR). This settlement is in accordance with Section 4(1)(b)(i) of the Act.
The complaint also implicated other financial institutions, including ABSA Bank Limited, Barclays Bank Plc, Barclays Africa Group Ltd, BNP Paribas, BNP Paribas South Africa, Citigroup Inc, Citigroup Global Markets (Pty) Ltd, JP Morgan Chase & Co, JP Morgan South Africa, Investec Ltd, Credit Suisse Group, Commerzbank AG, Bank of America Merrill Lynch International Limited, HSBC Bank Plc, ANZ, Citibank N.A, Nomura International Plc, Macquarie Bank Limited and JP Morgan Chase Bank N.A and Standard New York Securities Inc.
Public Interest SA acknowledges Standard Chartered Bank's admission of guilt, its commitment to full cooperation with the Commission in prosecuting other participants, and its agreement to pay the administrative penalty. However, Public Interest SA expresses concern that the penalty appears insufficient given the severity of the criminal conduct and its enduring adverse impact on the economy.
While the penalty constitutes 10% of SCB's annual turnover for the financial year ending 31 December 2019, Public Interest SA emphasises the potential for the negative impact on the South African economy to, arguably, extend into trillions of ZAR in the next decade. Public Interest SA advocates that competition authorities should have pursued punitive damages against SCB and its co-conspirators.
Furthermore, Public Interest SA calls upon the Legislature to implement more robust consequences against errant financial institutions to the current provisions of Section 4(1)(b)(i) of the Act. This includes the consideration of personal fines against executives as a deterrent against economic crimes of this nature, which have lasting repercussions for the people of South Africa.
Similar to the frequent misuse of sovereign fiscal ratings by rating agencies, the manipulation of currencies is increasingly employed as a tactic against emerging markets such as South Africa. This insidious practice represents a contemporary method utilised by greedy economic actors, reminiscent of economic hitmen, who operate under the guise of corporate entities.
ABOUT PUBLIC INTEREST SA
Public Interest SA is a non-profit organisation dedicated to promoting ethical business practices, advocating for social justice, and ensuring accountability in corporate conduct for the betterment of the South African society.
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