Picture: AFP
Following the announcement by the Competition Commission on Wednesday that it had asked the Competition Tribunal to prosecute 17 banks it alleges were colluding to manipulate the value of the rand, it has now merged that Absa will not be targeted for fines because it cooperated with regulators.
Fin24 reported on Friday that three people familiar with the matter said the bank, owned by Citigroup and Barclays, could be saved from being penalised by its disclosures to the Competition Commission – that is if they are proven to be correct.
Absa does not have full indemnity from being fined as yet.
The sources, who asked not be identified because the matter is still confidential, said the two banks had been working with the commission from an early stage.
Both Citigroup and Barclays were flagged by the commission as part of the rand-rigging probe that started in 2015, although the commission in its announcement on Wednesday did not name Citigroup and Barclays as its targets for fines.
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The Bank of America Merrill Lynch, HSBC, BNP Paribas SA, Credit Suisse, JPMorgan and Nomura were identified by the commission on its list as among the lenders that participated in price fixing and market allocation in the trading of foreign-currency pairs involving the rand.
The case has been referred to an antitrust tribunal.
Sources told Fin24 that prosecutors would argue that traders in New York and Johannesburg used the Reuters trading platform and Bloomberg chatrooms to conspire to rig the rand’s rate. The commission will also ask for the maximum fines, while banks, such as Absa, that have cooperated are likely to be granted leniency
The prosecution is expected to be shorter than most antitrust cases, “due to the straightforward nature of the matter”, one source said, adding that regulators were not asking for specific action against individual traders from the banks, but they will demand changes to incentives that encourage traders to contravene the country’s competition laws.
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