Standard Chartered has agreed to pay a R42 million fine in a settlement with the Competition Commission over accusations of manipulating the rand-dollar currency pair.
Price fixing scandal: Standard Chartered pays R42m fine
This landmark decision is part of a broader case involving various banks accused of manipulating the USD/ZAR currency pair.
By agreeing to the settlement, Standard Chartered essentially admitted its role in the price-fixing scandal. In a statement, the Commission celebrated a favourable conclusion to an eight-year-long legal tussle.
“The Commission welcomes SCB’s decision to reach a settlement on this matter and encourages other respondent banks to consider settling the complaint against them.
“Further, this settlement affirms the Commission’s pursuit of allegations related to the manipulation of the USD/ZAR currency pair, given the two ultimate impact of the currency manipulation on the value of the South African Rand,” Commissioner Doris Tshepe said.
Similarly, Standard Chartered Bank admitted its guilt in related charges in the United States, paying a $40 million penalty for engaging in “unsafe, unsound, and improper conduct” concerning emerging markets currency prices, including the South African rand.
In 2017, the Competition Commission accused twenty-eight banks, including Standard Chartered, of colluding to fix prices and divide markets concerning the USD/ZAR currency pair.
This, the Commission explained in a statement at the time, contravened section 4(1)(b)(i) and (ii) of the Competition Act.
The Commission’s investigation revealed that these banks manipulated the trade in the USD/ZAR currency pair, impacting bids, offers, bid-offer spreads, and the spot exchange rate.
Following appeals and legal challenges, the Competition Appeal Court (CAC) dismissed the banks’ appeals and upheld the Commission’s cross-appeal.
The CAC ordered the Commission to file a new complaint referral demonstrating the direct impact of the banks’ actions on the South African economy and consumers.
The case initially involved seventeen banks, later increasing to twenty-eight.