David Whitehouse, 19 December 2019
A call from South Africa’s competition regulator to be given extra-territorial powers to prosecute foreign banks whose actions affect South Africans has drawn short shrift from investors.
After an investigation into alleged collusion by 23 banks, ten of which have no presence in South Africa, to co-ordinate on spot dollar and rand prices, the Competition Commission recommended fines totalling 10% of the banks’ global revenues.
The banks involved, which include JPMorgan Chase, Bank of America Merrill Lynch and Credit Suisse, argue that the case should be dropped. The country’s Competition Tribunal in July ruled that the commission had no jurisdiction to impose the fines.
The Competition Commission, which has been investigating since 2015, this month responded by calling on the tribunal to set a precedent to allow them to prosecute foreign cartels if their actions affect South Africans. The tribunal has reserved judgement on the issue.
“No offshore bank is going to respond to this investigation or pay any penalties,” says Erik Renander, a fund manager at the HI EMIM Africa Opportunities Fund in London.