South Africa's antitrust investigators are calling for more than a dozen banks to be fined for colluding and manipulating trades in the rand. As Ivor Bennett reports, it could become the latest in a string of penalties handed to lenders around the world for rigging currencies.
100 rand would get you just over 7.5 dollars by today's rates In the past though, the rates haven't always been what they seemed. South Africa's competition commission has accused over a dozen banks of rand-dollar rate rigging. It says traders colluded via instant messaging chatrooms since 2007 at least. And created fictitious trades to distort supply and demand. (SOUNDBITE) (English) CARTELS DIRECTOR AT COMPETITION COMMISSION, MOGALE MOLALA SAYING: "If a firm is involved in a cartel it can approach the commission and disclose the information about the cartel in return for immunity from prosecution, so we were approached by one of the banks". We don't know which bank that was. But the ones named in the case include HSBC, Citigroup and JP Morgan. The case piles pressure on a sector that has already become a target of public anger. South Africa's ruling ANC party has called for the toughest possible sanctions. The regulator has recommended fines up to 10 percent of annual revenues. The total for rate-rigging fines worldwide now stands at around 10 billion dollars. But reputations are remarkably largely in tact. SOUNDBITE (English) NAEEM ASLAM, CHIEF MARKET ANALYST, THINK MARKETS, SAYING: "Reputation when it comes to a consumer that would be a different thing. A reputational point of view from an investor? They're still piling their money in." On Wall Street perhaps, but in Johannesburg they're still mulling things over. South Africa's banking index falling 1 percent after the announcement.