The South African government is prepared to act against market abuse, price-fixing and collusion in the private sector in order to protect the country’s economy, President Jacob Zuma said on Thursday.
Zuma was speaking after the Competition Commission announced on Wednesday that it has concluded an investigation into price fixing and market allocation in the trading of foreign currency involving the South African rand, covering the period from 2007, and found that some banks have a case to answer.
“This matter is still under investigation,” Zuma said in response to a debate on the State of the Nation Address (SONA) he delivered in Parliament last week.
“The Competition Commission can impose fines on companies but the impact is far reaching as it distorts our economic system,” Zuma said.
The Commission decided that it will take 17 banks operating in South Africa to the Competitions Tribunal for prosecution on charges of collusion.
According to the Commission, the banks have, since at least 2007, been fixing prices and market allocation in the trading of foreign currency involving the US dollar and the rand; manipulating prices of bids and offers and, amongst others, creating fictitious bids.
Earlier, the ruling African National Congress (ANC) said these acts of corruption have crudely exposed the ethical crisis in the South African banking sector.
“The act of manipulating the currency is an attack on the constitutional mandate of the South African Reserve Bank to protect the value of the South African currency,” ANC national spokesperson Zizi Kodwa said.
The ANC “takes an extremely dim view of the activities of the listed banks, understanding the banking sector as being instrumental to our quest for economic growth and development”, he said.
The profit-driven assault on the South African rand through such collusion and corruption by the banks flies in the face of efforts by the South African nation to prosperity for all, said Kodwa.
It is further an indication of how the markets are and can be manipulated by dominant oligopolies to cripple its functioning to suit their nefarious agendas, he added.
The ANC said it will closely follow the developments in this case and calls for the Competitions Tribunal to level against the banks the harshest possible sanction where they are found guilty; serving as a deterrent to any other players in any other industries involved in similar activities. Enditem