After carefully reading judge Dennis Davis’ comprehensive, detailed laceration of the Competition Commission’s last-ditch attempt to salvage its long-running complaint against a group of 28 local and foreign banks, I was left perplexed: why on earth has the commission pursued this case?
It also got me thinking about whatever happened to that forensic investigation into the commission’s dodgy procurement practices. The probe, announced in 2019, was set to go back three years, prompted by the Treasury’s concern about the commission’s frequent overspending, discoveries of improper expenditure by the auditor-general, and media reports about the commission’s suspect procurement habits involving Bryanston-based law firm Ndzabandzaba Attorneys.
I was still waiting for feedback from the Treasury when this column had to go to print, but I did reach out to DA MP Dean Macpherson, trade, industry & competition spokesperson. He said that he hadn’t heard anything further about this from the portfolio committee.
It was probably swept under the carpet, and former commissioner Tembinkosi Bonakele let off the hook, to avoid facing any consequences. Trade industry & competition minister Ebrahim “Masterplan” Patel always protected him, and hates anything that places the commission in a bad light.
So why on earth has the commission persisted with this case? Its failure to set out a cogent complaint against all but five banks is particularly odd given that it had received an application for corporate leniency from Barclays and Absa. Barclays, with Royal Bank of Scotland, RBS, JPMorgan, Citibank and UBS, have been fined more than $8.5bn by regulators globally. It seems likely that there are traders there who know exactly who did what, and when.
Instead of charging holding and sister companies (which don’t trade in forex), it could have written to the banks and asked for confirmation of which legal entities employ the traders. But it didn’t. Instead, the commission rushed out a half-baked complaint in February 2017, amid much public fanfare. Unusually, the commission placed the entire referral document, containing names of individual traders, on its website.
State capture
You may recall this was shortly after then finance minister Pravin Gordhan had filed an affidavit to have the courts declare that he could not interfere with moves by the major banks to cut ties with businesses owned by the Guptas. A concerted campaign against the banks was well under way.
This complaint created the scope for those benefiting from state capture to call loudly for the end to alleged private sector corruption. Perhaps the commission concluded that, politically, withdrawing the complaint wasn’t an option.
This doesn’t explain why the commission didn’t adequately shore up its original case with any further facts, despite being given the opportunity to do so by the Competition Tribunal, and having nearly six years to do so.
Who is to blame for this mess? The current commissioner, Doris Tshepe, was only appointed in June 2022, presumably after the decision to oppose the further objections lodged by local and foreign banks had been taken.
The commission’s decisions are made by its executive committee. A few of its longest-serving members, including the deputy commissioner, Hardin Ratshisusu, who served under the former commissioner, as well as the cartels manager, Makgale Mohlala, have much to answer for.
So does its legal representative, law firm Ndzabandzaba Attorneys. Its senior partner, Anthony Ndzabandzaba, previously served as head of training and development in the commission’s cartels division. The firm is alleged by DA employment & labour spokesperson Michael Cardo to have received R72m in payments from the commission from January 2015 to August 2018. It has presumably continued to benefit from this long legal skirmish.
It is high time the commission returned to its core function: the effective investigation and prosecution of complaints about cartels and abuses by dominant firms.
In the past three years it focused on consumer protection-type complaints rather than creating more competitive markets (excessive pricing of sanitisers and face masks by suppliers during Covid-19, for example). Fining small suppliers may be popular with politicians, but generally our retail markets are competitive and consumers can (and should) shop around.
Costly inquiries
The commission has also obsessed with compelling companies that want to merge to transfer ownership to “historically disadvantaged firms” and commit to “localising” in line with the department’s sector master plans (even though there is a separate Broad-Based BEE Commission, and neither BEE nor master plan participation is compulsory in SA).
The commission also embarked on protracted, costly market inquiries (banking, healthcare, public transport) that yielded recommendations that were mostly ignored. Its most recent market inquiries, into online platforms, fresh produce, media and steel, have yet to generate any measurable results.
So what now? It seems likely that despite mounting costs and prospects of success much reduced by Davis’ careful dissection of its case, it will continue this wild goose chase all the way to the Constitutional Court. Whether the apex court will agree to hear the case is not clear.
What is clear is that we need the results of that forensic investigation made public. For too long the commission’s work has been tainted by the whiff of political meddling.
The president’s craven approach to his cabinet, and specifically minister in the presidency Khumbudzo Ntshavheni’s treason accusation against the banks, is yet another stain on a blighted term of office.
• Avery, a financial journalist and broadcaster, produces BDTV’s Business Watch. Contact him at badger@businesslive.co.za.
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