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(Bloomberg) -- South African antitrust investigators mixed up the legal entities of some banks named in a currency manipulation probe and delayed hearings so they can reconsider the case, according to people familiar with the matter.
At a pre-hearing in Pretoria on June 23, the Competition Commission’s lawyers indicated that some complaints may be applied to new legal entities, the people said, asking not to be identified because the meeting was private. More hearings scheduled to start on July 20 have been delayed and the commission may have to devise a new strategy that could see it charge lenders individually rather than as a group, one of the people said.
The commission in February alleged that 14 banking entities colluded to manipulate the value of the rand. In filings in May, HSBC Bank Plc and Investec Bank Ltd. said the commission named the wrong legal entities. Standard Bank Group Ltd.’s South African unit, Bank of America Merrill Lynch International Ltd. and Standard New York Securities Inc. all said the traders the commission accused of manipulation on their behalf had either never worked for them or never traded the rand.
Standard Bank’s general counsel, Ian Sinton, said in an emailed response to questions on Tuesday that the antitrust regulator’s lawyers indicated at the hearings that the commission would revoke its complaint against some lenders and may accuse others. Representatives of the accused banks and the Competition Commission agreed to cancel formal hearings so that the regulator had time to amend its complaint, he said.
Standard Bank misunderstood what happened at the closed hearing, according to Competition Commissioner Thembinkosi Bonakele.
“There’s no truth at all that we may withdraw any allegations against any banks,” Bonakele said in an interview on Johannesburg-based Radio 702 on Tuesday. “It’s an error. It doesn’t mean we’ll never press any new charges against any other banks.”
Some lenders said in the papers filed in May that South Africa’s antitrust authority has no jurisdiction because there is no evidence the trades happened inside the country or had any effect on the economy. The commission was asked by the Competition Tribunal and lenders to make a clearer argument about its ability to target non-South African entities, the people said. The commission argued that because trades were made in the rand, it would’ve impacted the country, according to one of the people.
JPMorgan Chase & Co., Credit Suisse Group AG, HSBC Holdings Plc, Nomura International Plc and Commerzbank AG declined to comment. Standard Chartered Plc didn’t respond to emailed questions. Australia and New Zealand Banking Group Ltd. and Macquarie Group Ltd. didn’t immediately reply to phone messages.
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