The Competition Commission’s deal with Citibank is a farce

22 February 2017

The Competition Commission’s settlement agreement with Citibank is a travesty and an insult to all South Africans. According to the Commission’s statement, Citibank N.A. will pay an administrative penalty of R69 500 860 (Sixty Nine Million Five Hundred Thousand Eight Hundred and Sixty Rands) for their sabotaging the country’s economy. The reality is that this figure does not exceed 10% of Citibank N.A.’s annual turnover in the Republic of South Africa and does not even represent 10% of their turnover from currency trading.

The Commission has not disclosed the extent of damage caused by Citibank N.A‘s participation in the price fixing of US dollar rand exchange rate.  It is possible that the Commission may have levied a 6 or 5% on turnover of Citibank contrary to the maximum 10% penalty. This is despite the fact that the impact of the fixing of the rand might have caused far more damage the imposed penalty.

A weaker rand has meant that the country needed to spend billions of additional rands to import oil.   This has bled workers and the economy dry to cover higher fuel prices.  It has fuelled inflation of basic goods to cover higher transport costs.  The question is whether these financial plunderers will reimburse workers and the industry of these billions of rands. We want the SARB to explain exactly, what was the real cost to the economy and in job losses.

COSATU believes that only criminal sanctions against CEO’s and not traders will discourage traders from engaging in an anti-competitive behaviour. It is not clear why the competition commission is taking time to implement the criminal provisions of the Competition Amendment Act.

These companies are neither being punished nor deterred by these penalties and the South African government and the Competition Commission are just playing public relations games. This charade is meant to pacify financial institutions and to prove to them that South Africa is still committed to the free market. We are seeing a situation of “too big to be prosecuted” in South Africa after witnessing the “too big to fail” phenomenon during the 2008 Global Financial Crisis.

Issued by Sizwe Pamla, National Spokesperson, COSATU, 22 February 2017