Rand-rigging showdown in ConCourt: 'Whatever happens, a good sign SA didn't sweep allegations under the rug'
The Constitutional Court has started hearing arguments in the rand-manipulation case involving local and international banks, brought by the Competition Commission. The Money Show gets comment from experts, including the CEO of Future Forex.
South African rands money
The Money Show's Stephen Grootes is joined by Kokkie Kooyman, Executive Director and Portfolio Manager at Denker Capital, and Future Forex CEO Harry Scherzer.
The rand price-fixing case involving 28 local and international banks has started in the Constitutional Court.
In essence, the Competition Commission (CompCom) is appealing a Competition Appeal Court (CAC) ruling in January 2024 to dismiss the case against all but a handful of the institutions it accused of manipulating the currency.
Legal representatives for the banks had argued that the 158 chats over seven years presented as evidence, were flimsy as proof of a single overarching conspiracy.
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The international banks also said that South African courts do not have jurisdiction to hear the case because the alleged conduct did not happen in the country.
Giving more background, Denker Capital's Kokkie Kooyman notes that the alleged rand-fixing took place from 2007 to 2018,
He highlights how difficult it will be to prove an 'overarching conspiracy', which is the term used by the CompCom.
"The number of trades and the volume of transactions in the rand/dollar is so massive that it's impossible for banks to permanently change the rand value. And, from what I've heard today, they can prove that traders of the various banks were agreeing on a price... but that could be the same as when I'm trying to buy a share and phone my broker to ask, can you get this share for me at this price... and then a price is settled, which in the old days would have been over the phone."
Kokkie Kooyman, Executive Director - Denker Capital
"The Competition Commission says not only was this price fixing, but that the 28 banks acted in a cartel - it would be very difficult to prove they were all acting in concert, knowingly trying to change the value of the rand."
Kokkie Kooyman, Executive Director - Denker Capital
If this occurred in South Africa (which a few banks have acknowledged in terms of specific traders), would it also not then be happening in other places with other currencies?
Future Forex's Harry Scherzer says he'd be 'absolutely amazed' if it wasn't.
What is really positive about action taken by the CompCom is that they are actually doing something about it, he feels.
"We could have swept this all under the rug and maybe taken a back-of-the-envelope bribe.... but our Commission actually launched a proper case - which IF the banks are found guilty, sets a precedent and is a really good sign that we do have working regulations in this country."
Harry Scherzer, CEO - Future Forex
Scroll up to the audio player to gain more understanding of this complicated case