The Competition Commission on Wednesday referred a collusion case to the tribunal for prosecution against 17 banks, including three of South Africa’s big banks.
Anthony Crane, Competition Law Partner at law firm Dentons SA is concerned.
“This investigation could have serious ramifications for the banks involved as the Competition Tribunal is able to hand out administrative fines of up to 10% of turnover for collusive conduct such as price fixing. Last year 6 banks in the United Kingdom were ordered to pay USD 6 billion for manipulating foreign exchange markets in 2013. Coupled with the fact that our courts are now getting to grips with private damages claims as indicated in the recent SAA Comair matter, this could end up being an extremely expensive exercise.”
In the State of the Nation address the banking sector was criticised for its highly-concentrated nature and so the timing of the referral is unfortunate for the banks. However, they now have an opportunity to formally respond to the allegations before the Tribunal.
“In a world of substantial and ever-increasing fines, as well as the potential for private damages actions, it would be critical for the banks to show that they have stringent compliance policies in place. This would assist in providing accurate data and reports to the authorities to show that the conduct complained of was that of a deviant employee/s, and not common practice.”
Photo caption: Anthony Crane, Partner, Dentons law firm South Africa