The Competition Appeals Court has dismissed the Competition Commission’s rand manipulation case against the majority of banks – both local and international – accused of rigged trades involving the rand/dollar pair.

The court this week dismissed the commission’s eight-year-long case against all but four banks mentioned in the original investigation.

The cases were dismissed on the grounds of a lack of evidence, a lack of jurisdiction and overreach.

Even with the four banks where the case was not dismissed, there was no guilty ruling, just enough evidence that a case could be brought against them.

The appeals court said that the onus was on the commission to show “a common anti-competitive objective”,” by all the banks – that is, “an overall plan in which all of the respondent banks participated to pursue a common economic objective”.

“(The Commission) was required to show that each firm had made an intentional contribution by its own conduct to the common objectives pursued by all of the participants,” it said.

To this end, the commission fell short, with the court describing some links between the banks – or even holding companies, which were not involved at all – as being tenuous at best.

In February 2017, the Competition Commission referred a number of banks to the Competition Tribunal for price fixing involving the rand. The commission ultimately brought 28 banks under investigation, in what it called the “Forex Cartel” case.

The commission alleged that the manipulation impacted the exchange rate of the South African Rand, which in turn affected various parts of the South African economy, including imports and exports, foreign direct investment, public and private debt, and company balance sheets, with the attendant implications for the price of goods and services and financial assets.

Despite the case being ongoing for several years, it again shot to prominence in the latter half of 2023 when Standard Chartered – one of the banks involved – settled with the commission and agreed to pay R43 million for its part in the scandal.

Certain politicians were quick to jump on board and use the case to make wildly false claims about widespread currency manipulation and to use it as a scapegoat for failed economic policies that have kept South Africa’s economy in the doldrums for over a decade.

Ministers also used the case as an excuse to attack the private sector at large.

However, economic and banking experts – and National Treasury itself – made it clear that the manipulation and rigged trades in question were extremely isolated and only individual clients were harmed by the activity, not South Africa as a whole.

Treasury also clarified that the market manipulation in question ended in 2013 and that rules and regulations had long been put in place to mitigate and avoid this behaviour – thus, the rand collapse and economic stagnation seen over the last ten years are unrelated.

The full ruling can be read below (via Saflii):

Read: Rand manipulation: Treasury sets the record straight