The Constitutional Court is set to hear the Competition Commission’s bid to overturn a ruling that cleared most banks of wrongdoing in the rand-rigging case, with counsel Nkosingiphile Ngcukaitobi urging the court to keep the focus on the commission’s pleadings and reject attempts to introduce new facts in dismissal applications.
“The only admissible allegations are those contained in the commission’s pleadings,” Ngcukaitobi argued, warning that banks had tried to float new facts under the guise of dismissal applications. He said such moves undermine the Competition Tribunal’s ability to prosecute cartel cases, leaving proceedings bogged down in procedural objections rather than addressing the merits.
Ngcukaitobi told the Constitutional Court that cartels have evolved, becoming bigger, more complex, and transnational, and that they now operate across borders and products in pursuit of profit. “What we have here is something unique: they targeted the sign of our sovereignty, the rand, in a perverse scheme driven by profit motives,” he said.
South Africa, he noted, bears a special responsibility to pursue the case. “Perhaps for this reason alone, our institutions are the only ones with a legal interest in the prosecution of this cartel. At the heart of it is the rand,” he said, urging the court to adopt a doctrine from European precedent that would allow a “single overarching conspiracy” to be pursued, covering sprawling collusion across multiple players, strategies, and jurisdictions.
Under this approach, he explained, it is not necessary to prove that each bank participated in every form of conduct; instead, a holistic assessment would reveal whether the conduct pursued a common anti-competitive object, with shared participants, features, and means.
Earlier, the Competition Appeal Court dismissed charges against 23 banks, leaving four institutions to face the commission’s case. Investec is the only South African bank not to appeal, while Standard Bank, FirstRand, and Nedbank maintain their innocence, arguing the allegations have already harmed them financially and reputationally.
The Constitutional Court is due to hear the case over the next four days.
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What to watch
– The case hinges on whether the commission can frame a single overarching conspiracy that justifies prosecuting a cross-border, multi-party cartel.
– A ruling could reshape how competition authorities pursue sprawling, joint anti-competitive schemes in SA and potentially beyond.
– The rand-rigging allegations date from 2007 to 2013 and center on information-sharing in secret channels intended to manipulate the rand-dollar exchange rate.
Additional comments
– This hearing marks a significant moment for SA’s competition authorities, signaling a shift toward more expansive doctrines that can address modern, interconnected cartel activity. If the court accepts the single overarching conspiracy approach, prosecutions could target broader collusion networks even when individual banks are not shown to participate in every facet of the scheme.
– The case also highlights the ongoing tension between procedural rules and substantive justice in cartel prosecutions. A decision could either streamline future cases by focusing on core conduct and objectives or risk narrowing the scope of what can be prosecuted if the doctrine is not applied carefully.
– For market observers, the outcome could impact banks’ risk profiles and reputational concerns, even for those not found to have violated the law, given the high-profile nature of forex investigations and the potential for future enforcement actions.