Standard Chartered Bank, a UK-based multinational, has reached a settlement of R42.7 million with the Competition Commission regarding its involvement in the rand/dollar manipulation scandal uncovered in 2017.
Among the 28 banks prosecuted by the commission for manipulating the rand/dollar currency pair between 2003 and 2013, Standard Chartered admitted liability in the case. The bank engaged in manipulating the USD/ZAR currency pair by fixing bids, offers, bid-offer spreads, the spot exchange rate, and the exchange rate at the FIX.
Moreover, the bank participated in a market division by allocating customers, wherein one trader withheld or pulled their bid or offer from the market to facilitate another trader’s trade completion. This behavior was found to contravene section 4(1)(b)(i) & (ii) of the Competition Act, 89 of 1998, as amended, according to the commission.
In February 2017, the Competition Commission initiated a case against multiple banks, referring them to the Competition Tribunal for rand price fixing. The investigation, known as the “Forex Cartel” case, involved 28 banks and had significant consequences on the South African economy, impacting imports, exports, foreign direct investment, public and private debt, and company balance sheets.
Standard Chartered’s settlement marks the conclusion of an eight-year litigation between the commission and the bank over currency manipulation allegations. Citibank had previously settled a similar case with the commission in 2017, agreeing to a penalty of R69.5 million.
While the SCB settlement agreement awaits confirmation by the Tribunal, a hearing is scheduled for November 15, 2023. The settlement is seen as a positive step by the Commission, which encourages other respondent banks to consider settling allegations against them. Commissioner Doris Tshepe emphasized the significance of addressing manipulation in the USD/ZAR currency pair, given its profound impact on the value of the South African Rand.