Rand manipulation: Ntshavheni not bothered by private sector criticism

Despite criticism from industry heavyweights on her recent utterances, Minister in the Presidency Khumbudzo Ntshavheni said she would “not back down” from her comments about the private sector.

Ntshavheni hit back, saying she was not bothered by any critics after she accused the private sector last week of engineering the state’s collapse in light of the rand manipulation saga.

She said the private sector continued to “engineer and do machinations to ensure that the government collapses”.

This behaviour is reported to have occurred daily in the spot foreign-exchange market and – according to currency traders – went on for at least a decade.

At least 15 of the 28 banks prosecuted, including Barclays (Absa in SA), HSBC, Goldman Sachs, Citigroup, JPMorgan Chase, Deutsche Bank, Lloyds, Royal Bank of Scotland (RBS), Standard Chartered, UBS and the Bank of England, cooperated with investigations by regulators.

ALSO READ: Experts: How the rand was fiddled

For SA, the commission points out Standard Bank SA, Investec, Nedbank, RMB/FirstRand, Commerzbank, ANZ, Standard Americas, Nomura, Macquarie, BoA, Credit Suisse, HSBC, BNP Paribas, JPMorgan, Citibank and Barclays.

Election time

University of South Africa associate professor of African politics, Everisto Benyera, said it was election time and there was a need for politicians to be seen making the right noises.

“So the government normally indicates left and then they turn right so we can hear Minister Ntshavheni saying the right things,” he said.

“But when it comes to action, this government has been blamed a lot for saying the right things, but not doing anything. So timing in politics is everything.”

He said people had been aware of the rand manipulation saga for a long time, and the only reason it gained the right attention now was because of elections, “and this was the best time to whip the nation into seeing the evils of capitalism”.

ALSO READ: Standard Bank did not manipulate the Rand – CEO

He said: “But for me, the crux is what exactly is going to happen. If we look at all the commissions of inquiries with all those very solid recommendations, nothing has been done. So, most likely, they’ll make the right noises, then there’ll be a commission of inquiry which will take another two years. And then the recommendations will gather dust like the Seriti, the Zondo and all other commissions.

“Then the bank will take the report of the commission on review then its review on review then to the Constitutional Court. By then we will all be dead and there will be new scandals.”

Benyera added this was the crisis in South Africa of sentencing such an important issue to justice by commission.

Ntshavheni said, however, there was an unsaid narrative the government must not “dare demand” recourse for “poor South Africans badly affected by the rand manipulation”.

‘Rand manipulation would not have influenced the depreciating trend of the currency since 2013’

But National Treasury recently insisted the rand manipulation would not have influenced the depreciating trend of the currency since 2013, as it was driven by broader changes in the global and domestic economy.

ALSO READ: Treasury concerned after bank admits to manipulating the Rand

“The value of the currency today, which has depreciated against the dollar, and the resulting impact on prices, should not be attributed to these instances of misconduct between 2007 and 2013,” it said.

In February 2017, the commission referred all these banks to the Competition Tribunal for price fixing involving the rand.

5 of 28 banks assisting the regulator to prosecute 23 others

According to Competition Commission’s divisional manager for cartels, Makgale Mohlala, five of the 28 banks were assisting the regulator to prosecute 23 others.

It was alleged around R1 trillion changed hands daily between 2007 and 2013 in currency trading, which made for a total of two quadrillion, one hundred ninety trillion rand over the six years.

Mohlala said it was important to clarify he did not say R1 trillion profit was made by banks and companies involved.

ALSO READ: ‘There will be consequences’: Ntshavheni slams private sector for trying to collapse SA with rand manipulation

“So you’re trading with euro, dollar, and yen and all that in the trading market is trillions a day. So, it’s not the cartel that has made the trillion, or it’s not the profit that has been made, but it is the trading in general.”

He said the commission may be able to quantify losses only after the prosecution of the matter.