More than six years after the Competition Commission accused 18 banks of colluding to fix the rand exchange rate, Standard Bank is still trying to get its hands on the commission’s evidence for the case, in which it says it did nothing wrong.
"We have not acted as alleged, have done nothing unlawful and will continue to defend or pursue legal proceedings in pursuit of challenging the Competition Commissions allegations," the bank told Business Day in response to questions. "Standard Bank maintains that the allegations made are without merit and it will continue to defend its position."
Standard Bank’s comments come after it tucked away an update on the ongoing forex collusion matter on page 91 of its results for the year to end-December 2022, published last Thursday. In that update, the bank says it has conducted its own investigations into the matter with the help of external counsel and "found no evidence that supports the complaints".
Africa’s biggest lender wants the commission to hand over the details of its investigation into the alleged forex collusion so that it can get a better understanding of why it stands accused. Standard Bank managed to get its arguments in favour of being granted access to the evidence heard by the Competition Appeal Court (CAC) on February 21 and says it expects a ruling to be made in the first half of this year.
Exchange rate
The commission had opposed the handing over of its evidence on the grounds that such disclosure would give Standard Bank an unfair advantage in litigation before the Competition Tribunal.
The matter goes back to February 2017 when the commission filed a referral with the tribunal against 18 banks, many of them foreign, which it alleged had colluded to rig the rand-dollar exchange rate. The commission later sought to add five other banks to the charge sheet. The respondent banks opposed the referral on grounds ranging from jurisdiction to claims the commission had failed to plead sufficient facts.
Ultimately, the tribunal found that the main weakness in the commission’s case was its "unwillingness to commit itself unequivocally to a particular formulation of its case". That resulted in "a lack of focus and consistency" in its referral and supplementary documents.
The tribunal also found that the relationship between the traders said to be responsible for the alleged collusion and the banks themselves was unclear. As a result, the tribunal ordered the commission to file an amended referral, confining its case to that of a single overall conspiracy and to ensure that the affected banks understood exactly what they were being accused of.
Wrangling
However, as the legal wrangling dragged on the dispute between Standard Bank and the commission ended up in the Constitutional Court.
That court ruled in February 2020 that the commission did not have to disclose the details of its investigation in the forex collusion matter until after Standard Bank had filed a written defence and the tribunal had directed all parties to make their relevant documents available for discovery.
The Constitutional Court also ordered the CAC to reconsider whether it had jurisdiction over the matter, particularly regarding the involvement of foreign-domiciled banks.
Ultimately it was decided that the CAC did have jurisdiction over the affected foreign banks provided the commission could prove the alleged collusion had a direct, foreseeable and material effect within SA.
"The appeal court also ruled that the allegations against all the respondents were so vague as to be unintelligible," Standard Bank said in the update published in its results.
The commission was then compelled to file an entirely new complaint affidavit, which all of the respondent banks, other than Investec, filed objections to, or notices seeking more details.
Hearings on these issues took place before the tribunal between November 29 and December 7 2021, though the banks are still awaiting an outcome.
Independent of the tribunal hearings, Standard Bank also applied to the CAC for a ruling that the Competition Commission’s decision to include it in its forex collusion referral be reviewed and set aside as it regards the decision as "unconstitutional and irrational".
"The filing of that application triggered an obligation upon the commission to hand over all information that it had relied on in reaching its decision," Standard Bank said.
Though the bank says the commission has refused to hand over the evidence thus far, the pending CAC ruling on the February 2023 hearing could change that.
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