By Johnathan Paoli
The long-running saga over alleged rand–dollar rigging returned to the spotlight on Tuesday, with the Constitutional Court reviewing the Competition Commission’s appeal against a ruling that cleared most local and international banks of collusion.
Senior Counsel Advocate Tembeka Ngcukaitobi, representing the Competition Commission, described the case as a “classic example of the evolution of cartels,” arguing that the alleged conduct was sophisticated, transnational, and struck at the very heart of South Africa’s economic sovereignty.
“This is something unique. They targeted the sign of our sovereignty, the rand, in a perverse scheme driven by profit motives,” Ngcukaitobi told the court.
“Cartels no longer respect borders or products in pursuit of profit. South Africa has a special responsibility to prosecute this conduct because at the heart of it is the rand.”
The case dates back to April 2015, when the Competition Commission filed a complaint against more than two dozen financial institutions for alleged price-fixing and market division in trading the USD/ZAR currency pair between 2007 and 2013.
According to the Commission, traders at several banks colluded in secret chatrooms, sharing sensitive information and coordinating strategies to influence the exchange rate.
The complaint was formally referred to the Competition Tribunal in 2017.
Since then, the matter has been mired in legal disputes, with banks challenging the referral through multiple objections and appeals. In January 2024, the Competition Appeal Court (CAC) dismissed charges against 23 banks, narrowing the case to just four institutions.
Two international banks, Citibank and Standard Chartered, have already admitted liability, paying fines in 2017 and 2023, respectively.
Several others, including Standard Bank, FirstRand, Nedbank, and a host of foreign institutions, continue to deny any wrongdoing.
Ngcukaitobi said traders allegedly manipulated the rand through five strategies: coordinated trades, reversing or withholding transactions, influencing the currency fix, placing fake bids, and sharing sensitive information.
“What the banks were doing was coordinating trading in order to control the rate by putting what is called fake bids,” he said.
“There was an information overload among those competitors at all stages of trading. This is a form of currency manipulation.”
The Competition Commission contends that such practices violated the Competition Act by dividing markets and engaging in anti-competitive conduct.
Ngcukaitobi argued that the case illustrates the need for South Africa’s competition authorities to adopt the “single overarching conspiracy” doctrine, used in Europe to prosecute sprawling collusion cases involving multiple players and jurisdictions.
“It is not necessary to find that each bank participated in every form of conduct. What matters is whether the conduct pursued an identical anti-competitive object, with common participants, common features, and common means,” he explained.
Ngcukaitobi told the Constitutional Court that several traders involved in the South African case had already been convicted in the United States for similar conduct.
“The authorities of the United States have convicted traders, the same players prolific here, of manipulating the rand and the dollar,” he said, emphasising that the conduct was not isolated.
The Commission maintains that the CAC erred by dismissing its case against the majority of banks before the merits were tested, effectively preventing the Tribunal from hearing full evidence.
“It has become almost impossible to prosecute cartels because we never get to the merits of the case. We are always held up in procedural objection after objection,” Ngcukaitobi said.
Local banks implicated in the matter continue to maintain that they played no part in any collusive behaviour.
Standard Bank, FirstRand, and Nedbank argue that the allegations have already caused severe reputational and financial harm.
Investec is the only South African bank that has not appealed.
Standard Bank and others contend that the Constitutional Court should not grant leave to appeal, insisting the case raises no constitutional issue and that extending the proceedings would not be in the interest of justice.
For the Competition Commission, the case represents more than a decade of effort to hold financial institutions accountable for what it views as deliberate manipulation of the rand–dollar exchange rate.
For the banks, however, the proceedings risk further reputational damage in a sector that relies heavily on public trust.
At the heart of the legal battle is whether South African competition authorities have jurisdiction to investigate and prosecute firms based outside the country when their conduct affects the local economy.
A ruling in the Commission’s favour would set a significant precedent for tackling transnational cartels whose activities cross borders.
The Constitutional Court is expected to hear arguments over four days.
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