CONSTITUTIONAL COURT ENDS CURRENCY MANIPULATION CASE AGAINST SOUTH AFRICAN BANKS
Justice Owen Rogers authored the majority judgment that has effectively terminated the Competition Commission’s decade-long effort to prosecute South African banks for alleged rand manipulation, delivering a ruling on Tuesday that clears the country’s three largest domestic lenders of any further legal action.
The case represents a substantial institutional setback for the commission. Since 2017, the regulator had pursued allegations that 28 banks, both domestic and foreign, coordinated rand-dollar trading to manipulate the foreign exchange rate for their own benefit. The commission’s inquiry identified evidence of collusion within an instant messaging platform known as “ZAR Domination” and recommended fines reaching 10 percent of each bank’s South African revenue.
The majority judgment rejected the commission’s appeal against most of the banks named in the litigation. Standard Bank of South Africa, Nedbank and First Rand Bank, the three major domestic institutions implicated in the scheme, will now face no prosecution. The court also ruled against the commission’s pursuit of Bank of America Europe Designated Activity Company, Australia and New Zealand Banking Group Limited, Nomura, Commerzbank, Macquarie, HSBC Bank USA NA, Merrill Lynch Pierce Fenner and Smith Incorporated, Bank of America NA and Credit Suisse Securities.
The commission achieved only partial success. The court permitted the regulator to continue proceedings against BNP Paribas, JPMorgan Chase Bank, HSBC Bank and Standard Americas Incorporated, narrowing the scope of potential prosecution significantly from the original 28 defendants.
The jurisdictional and evidentiary disputes at the heart of the case exposed the limits of the commission’s reach. Foreign banks had challenged the regulator’s jurisdiction to prosecute them, while domestic lenders contended it lacked sufficient evidence to proceed. The commission’s legal representative, advocate Tembeka Ngcukaitobi, argued during the appeal that the banks’ conduct had weakened the rand and continued to harm the country’s trade position in dollar-denominated products valued at approximately two trillion dollars. The court found, however, that the commission’s case rested on incorrect factual assumptions and lacked the evidentiary foundation necessary to justify further legal action against Standard Bank and its co-defendants.
Standard Bank responded by reaffirming its position throughout the proceedings. “The judgment affirms the consistent position maintained by the bank since the inception of this matter in 2017 and throughout these proceedings, that neither Standard Bank nor any of its employees was involved in a conspiracy to manipulate the rand,” the bank stated. The institution also emphasized its commitment to regulatory compliance and integrity within South Africa’s financial markets.
By contrast, the commission’s partial victory against the four remaining defendants leaves open the question of whether the regulator can sustain those proceedings with the evidentiary record the court has already scrutinized so closely.
The outcome marks a decisive conclusion to litigation that consumed substantial regulatory resources over more than a decade. The commission’s inability to prosecute the three largest South African banks substantially diminishes the scope of accountability it originally sought to establish for the alleged coordination scheme. Whether the narrowed case against BNP Paribas, JPMorgan Chase Bank, HSBC Bank and Standard Americas Incorporated can survive the same evidentiary scrutiny remains the central question the commission must now answer.