By Tiisetso Motsoeneng

JOHANNESBURG (Reuters) – Some of the banks South African regulators have alleged rigged the rand currency say the case against them lacks specific detail about anti-competitive conduct and its impact, three sources with direct knowledge of the matter said.

The banks have also questioned whether the country’s Competition Commission can penalise banks which do not have subsidiaries or branches in South Africa, the sources said.

The Competition Commission is seeking to impose fines on more than a dozen local and foreign banks that it alleges colluded to coordinate trading in the rand and the U.S. dollar.

The Commission launched the investigation in April 2015, joining a global clampdown that has led to big banks being fined around $10 billion in total for rigging interest rate and forex benchmarks.

It referred the case to the Competition Tribunal, which holds hearings on anti-trust matters before making a ruling. The Commission has recommended that the Tribunal impose fines amounting to 10 percent of the banks’ South African revenues, the maximum allowed.

At a closed preliminary Tribunal hearing in March, some of the banks raised objections about the lack of specific detail in the case to allow their lawyers to present a defence, one of the sources said.

The Tribunal will meet again in July to consider the banks’ objections if the Commission has done enough to fine-tune its case, the sources said.

The Competition Commission did not immediately respond to a Reuters’ request to comment.

Under South African regulations, the Commission is required to investigate anti-competitive cases within South Africa, or those that have an impact in the country.

“If there was an anti-competitive conduct, as the Commission alleges, the question then is: did it have an effect in South Africa? That’s one jurisdictional issue the banks have raised,” another source said.

Another issue raised was how banks with no subsidiaries or branches in South Africa would be affected.

“Some of the banks want jurisdictional issues to be cleared up because some of the them named have no branches in South Africa,” one source said. “How do you calculate a fine for banks with no branches in South Africa?”

Australia’s ANZ Banking Group has no branches in South Africa. Nomura only launched a branch in South Africa in April last year, almost a year into the Commission’s investigation.

Among the banks, Barclays Africa Group, a regional unit of Barclays Plc, has been granted conditional immunity from prosecution in return for its cooperation in the investigation.

In February, the local arm of Citigroup was fined $5 million for its role in the affair. The Commission said it had set the fine for Citi Bank NA South Africa at less than 10 percent of its annual turnover after the bank “undertook to cooperate with the Commission.”

Other banks named in the investigation were Standard Bank, Investec, JP Morgan, BNP Paribas, Credit Suisse Group, Commerzbank AG, Macquarie Bank, Bank of America Merrill Lynch (BAML), HSBC Plc and Standard Chartered Plc.

Standard Bank, South Africa’s second biggest bank by market value, said its own internal investigation had found no evidence of any wrongdoing.

“Nonetheless, Standard Bank is treating these allegations very seriously and will engage fully with the Competition Commission and the Competition Tribunal to better understand the basis for the complaints,” spokesman Erik Larsen said.

StanChart would continue to co-operate with the Tribunal process, spokeswoman Geraldine Matchaba said. JP Morgan, Commerzbank, Bank of America and Nomura declined to comment. Credit Suisse, BNP Paribas, HSBC, ANZ and Macquarie did not respond to email requests for comment.

http://cnbc.africa/news/2017/02/20/south-africa-watchdog-settles-with-citi-over-currency-rigging/

(Editing by Jane Merriman)