Financial services provider Standard Bank has denied manipulating the value of the rand and having any involvement in anticompetitive or criminal conduct, despite admitting fault before the Competition Tribunal and a follow-up statement issued by the National Treasury on November 24 that spelled out government’s concern regarding the admission of misconduct relating to the trading of rands and dollars. 

The bank has claimed that media and social media coverage has contained “false and inaccurate comments” related to the Competition Commission’s investigation into currency manipulation.  

“These comments incorrectly link various unrelated and unfounded allegations with the Competition Commission inquiry currently under adjudication before the Competition Appeal Court,” Standard Bank said in a statement on November 24. 

“All such claims are false. Standard Bank will continue to use every avenue provided to it in law to defend itself against these false allegations,” the bank said. 

Despite the bank’s protestations, it was established at the Competition Tribunal that “... between 2007 and 2013, [Standard Bank] fixed prices of bids, offers and bid-offer spreads in relation to spot trades of [South African rand] currency pairs through bilateral and multilateral communications using instant messaging platforms and other means of communication.” 

The tribunal further confirmed that Standard Bank “... traders assisted each other through allowing a trader with a large open risk position to complete trades first before trading and through holding and/or pulling their trades to reverse liquidity for each other instead of trading normally in the market.” 

Treasury said it views this matter in a serious light and that it welcomes the R42.7-million fine imposed on Standard Bank 

“Assertions that Standard Bank is not supportive of the interests of our customers, of South Africa’s economy and society and of the Constitution of South Africa are not consistent with how Standard Bank conducts itself,” the bank said, despite the tribunal’s findings. 

However, Treasury said Standard Bank’s behaviour was precisely the type of abuse it had in mind in 2011 when proposing and implementing the Financial Sector Regulation Act (FSRA) as part of the Twin Peaks reform. 

The reform put in place a new market conduct regulator to ensure that all financial institutions treated their customers fairly and operated with the highest ethical standards. 

In addition, Treasury submitted regulations to ensure banks do not engage in unfair practices or misconduct when setting reference rates, which are used in the pricing of derivatives and other financial contracts. 

Treasury said it would introduce further legislation next year to ensure South African financial markets are fair, transparent and operate with integrity. 

Treasury said the bank’s actions likely only harmed individual clients and did not influence the depreciating trend of the currency since 2013, the level of which it said was driven by broader changes in the global and domestic economy.  

“The value of the currency today, which has depreciated against the dollar, and the resulting impact on prices, should not be attributed to these instances of misconduct between 2007 and 2013,” it said. 

Standard Bank CEO Sim Tshabalala said on November 24 that, while some of the actions of its employees were indeed unethical, they were not necessarily illegal. 

“When we discovered in 2015 that some employees of our subsidiary in Tanzania had committed crimes, we immediately self-reported this and accepted the fines and sanctions. When we discovered that some employees had opened accounts unethically (but not illegally) in South Africa in 2020, we were transparent while the matter was being investigated and informed all the affected parties,” he said. 

Tshabalala insisted that Standard Bank was patriotic and would never intentionally seek to undermine the country’s economy or its currency. 

“We’re not playing for time or looking for a deal. When we say that we are innocent of currency manipulation, we mean it. We will not settle. Where we find that our people have engaged in wrongful conduct, we will act swiftly and will work with the relevant authorities. Where we find no evidence of wrongdoing, we will protect and defend our people," he said.