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South Africa's Barclays Africa CEO 'deeply regrets' role in FX rigging
February 23, 2017 / 12:47 PM / 9 months ago

South Africa's Barclays Africa CEO 'deeply regrets' role in FX rigging

JOHANNESBURG (Reuters) - South African lender Barclays Africa asked for forgiveness on Thursday for its role in rigging the local currency, a scandal that has raised questions over the dominance of four big local banks.

“We deeply regret that this conduct took place within our organization,” Chief Executive Maria Ramos said. “Those who are found to have contravened our rules and conduct will in due course be held accountable.”

South Africa’s Competition Commission said last week that it had found more than a dozen local and foreign banks had colluded to coordinate trading in the rand and the U.S dollar using an instant chat room called ZAR Domination, a reference to the rand’s official currency market code.

It recommended fines amounting to 10 percent of the banks’ South African revenues in a scandal that has also piled political pressure on the four banks, which have around 90 percent of the national banking market.

The Commission began its investigation in April 2015, joining an international probe into the manipulation of foreign exchange rates that has led to big banks paying more that $10 billion in settlements.

Barclays Africa, a regional unit of Britain’s Barclays Plc, has already been granted conditional immunity from prosecution in return for supplying information that would lead to the successful prosecution of the other cartel members.

Local lender Standard Bank, which is also among the 17 named in the investigation, said on Thursday it is in talks with the watchdog and has not so far suspended any employees.

“Pending the outcome of these engagements and in the light of these historic allegations only having been brought to Standard Bank’s attention on Feb. 15, no suspension of current employees of Standard Bank has taken place,” it said in a statement.

The local arm of Citigroup agreed to pay a reduced $5 million penalty for cooperating in the investigation while Investec has said it will seek further information from the regulator to continue to co-operate.

Finance Minister Pravin Gordhan said in his budget speech on Wednesday that the government would crack down on anti-competitive behavior with new regulation.

The scandal has weakened the share prices of South Africa’s listed banks. The sector index dropped by about 1 percent by mid-session on Thursday.

Former Citigroup foreign exchange dealer Christopher Cummins and Jason Katz, who worked at Barclays and later BNP Paribas SA, pleaded guilty in the United States to conspiring to fix currency prices last month.

Both, along with others, are named in the South African regulator’s report on its investigation that has been referred to the Competition Tribunal, which holds hearings on antitrust matters before giving a ruling.

Reporting by TJ Strydom and Tiisetso Motsoeneng; Writing by James Macharia; Editing by David Goodman/Ruth Pitchford

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