‘When they manipulate the rand it affects the value of the rand’

Manager of the Cartel Division at the Competition Commission, Makgale Mohlala has argued that the commission has jurisdiction to prosecute over 14 international banks, which allegedly colluded in manipulating the rand-dollar exchange rate.

Mogale says while the actions of the banks may have taken place outside the country, they had an impact on the SA economy.

The matter relates to a 2017 investigation by the commission. It investigated allegations of currency price fixing by over 20 local and international banks, brought before the Competition Tribunal. Proceedings took place at the Johannesburg High Court.

Earlier this year, the Tribunal denied an application by the banks to dismiss the currency collusion matter. The banks have argued that a declaratory order stating that they had contravened the Competition Act would be invalid if the South African authorities do not have jurisdiction over banks operations outside the country.

Makgale Mohlala of the Competition Commission says, “Remember when they manipulate the rand it affects the value of the rand. Whether the rand is weak or strong it’s mainly because of their activities of manipulating it. So the rand has been affected by their action so the South African economy has been affected, so we are saying as the commission that we have jurisdiction to prosecute the matter.”

Senior counsel Paul Farlam, who represents the Bank of America, says the Competition Tribunal cannot give a declaratory order against the bank as it has it has no jurisdiction.

“So if you’re giving a declaratory order for the purpose of 65, you must be satisfied that the court would have competence to consider the declaratory order under Section 65. And therefore as an indication you haven’t in fact collapsed the distinction between personal and subject matter jurisdiction,” says Farlam.

Advocate Mike van der Nest, who represents JP Morgan, also maintained that the Tribunal has no jurisdiction over the international banks.

“You don’t extend your territory, you don’t go outside your territory into another territory, unless there’s a permissive rule and in the absence of a permissive rule to the contrary, Carenza’s case tells you, that jurisdiction then remains South African jurisdiction, “says Van der Nest.

Advocate Tembeka Nqukaitobi, who represents the Competition Commission, is expected to present the commission’s cross appeal when proceeding continue on Friday the 13th of December.