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Now that election season is upon us, let’s put the spotlight on bank corruption as a voter issue


Melusi Ncala is Acting Lead Coordinator for Stakeholder Relations and Campaigns at Corruption Watch.

Not so long ago, the media were full of stories about the major local banks’ alleged manipulation of the rand and the dollar. But the topic of corporate corruption has not made it as far as party election manifestos – perhaps because it is unsuitable as a tool to play on voters’ emotions.

When the story about the Competition Commission pursuing corruption by banks that fixed the exchange price between the South African rand and the US dollar resurfaced in the latter part of 2023, I mused at the headlines, public conversations and politicians’ reactions.

In terms of socioeconomic impact and depth, corporate corruption in South Africa is often understated and perpetrators are not rigorously scrutinised and sanctioned by the state. Therefore, it was intriguing to witness a shift in focus from the usual appropriate outrage at the public sector to scorn of the private sector, though much of it was political theatre.

We have seen investigative approaches of granular detail in respect to the State Capture Commission where accounting firms particularly, as corruption enablers, were under the spotlight.

Read more in Daily Maverick:  Competition Commission’s currency rigging case against most banks collapses

However, the commission did little to unpack the money laundering networks that were facilitated by some of the country’s big commercial banks – despite evidence submitted by Shadow World Investigations and Open Secrets who mapped out the various banks’ roles in funnelling proceeds for those accused of corruption.

Besides attempts to reach financial settlements and impose fines and attach assets, what has come of the furore relating to Steinhoff’s blatant corruption that impacts the South African government’s investments managed by the Public Investment Corporation?

According to media reports a while back, the Hawks were of the view that aspects of the case could go to trial, but the National Prosecuting Authority was reluctant.

There was some attention on the construction mafia following the hype of the 2010 Fifa World Cup, but has anyone been prosecuted for hyperinflating industry prices? Justice for South Africans in that matter too comes in the form of mere fines – the proverbial slap on the wrist.

Corruption Watch exposed mining-affected communities who are not benefiting from royalties and beneficiaries of farm worker equity schemes who are shortchanged by commercial interests. In both these cases, the government’s complicity is obvious, the marginalised are the sole victims, and there is no accountability by private parties.

Banks hold the power

So, as a safeguard against anti-competitive behaviour, and attempting to ensure a semblance of fair play in the economy in the public interest, the Competition Commission has long investigated improper conduct by local and multinational banks accused of manipulating exchange rates between the South African and US currencies.

This follows whistle-blower testimony and agreements to cooperate by some of the accused. The rest of the corrupt posse are intent on fighting the institution on technicalities relating to jurisdiction and law. Time will tell whether their obfuscations are legitimate, or they will account for their greed.

However, we ought to unpack what transpired and its probable implications for ordinary people. No matter how one may try to slice and dice it, the accused banking institutions must answer to corruption allegations, given that they were entrusted with a resource and felt at liberty to abuse it for their private gain. These entities, though subjected to the Banks Act, Financial Intelligence Centre Act, and other legislation, are largely autonomous, especially in respect to the topic at hand.

In a minimally regulated financial market regarding foreign currency exchange, the banks, according to the Competition Commission, as a cartel deliberately set selling and buying markers for the two currencies, thus maximising their profits.

Those who defend this unconscionable act say the practice is within the realm of reasonability in profit-making businesses. They omit that the banking sector is the primary avenue through which deposits are made, kept and disbursed. Banks are the architecture through which pivotal export and import activity occurs.

In essence, they are a gateway that we use for the exchange of goods and services in and outside the country.

Thus, they influence economic productivity and, more importantly inflation, for which the South African Reserve Bank is responsible. When we take this into account, we realise that a great deal of power is entrusted to bankers.

No action to address long-standing situation

But this case, as deplorable as it is, raises broader questions and these are directed at our political establishment – and what better time than the election season to ponder on these, since our so-called honourable representatives are appealing to us to entrust them with power once more.

Considering that this matter has been ongoing, it concerned me to see parliamentarians behave as though the revelations were a surprise. They shouted “accountability”, called for regulatory bodies to be dragged before Parliament, and huffed about the banks being “a law unto themselves”.

They have all the resources at their disposal to research, investigate and, most importantly, fix the problem – so their pretence at ignorance is unconvincing.

And at no point did they reflect upon their own shortcomings and oversight in dealing with the matter.

Manifestos overlook bank corruption

Nevertheless, I continued to listen to discussions as they developed and I thought, perhaps hoped too, that the timeliness of this case coming up again may lead to some manifesto commitments, given the ardour of some of the political personalities. After all, we are all in agreement that corruption plagues our society, are we not?

True to form, when electioneering kicked off, the decibels dropped and finding any promise on dealing with this type of corruption became an impossibility.

So far, the newly established formation, Rise Mzansi, figures that to combat corruption we mainly have to rid ourselves of cadre deployment. The DA has sung the same tune, but thankfully we have the metros in Gauteng and the Western Cape to show us how that worked out. But still, no mention of effective strategies to combat corporate greed.

The EFF, apart from mainly shaming politically exposed persons and calling for long sentences for those who steal from the state as strategies to deal with corruption, said nothing about bank graft at its manifesto launch. This is despite some members speaking boldly on social media and at portfolio committee meetings about the wrongful conduct of the banks.

Read more in Daily Maverick: Elections 2024 Knowledge Base

Read more in Daily Maverick: 2024 elections

Meanwhile, the ANC is sure to remind us of its Tintswalo track record in its elections campaign, but says nothing about how, in the past five years, she was a victim of an epic banking scam from which it failed to protect her.

Ultimately, at what point will the fight against corruption be about righteousness and integrity instead of being a weapon and a rhetorical refrain for the popular vote?

The forthcoming national and provincial polls afford us an opportunity to determine who can address these concerns. Hence we, the ordinary man and woman, should maintain the pressure on those who claim to represent our interests.

Your vote cannot be a given – it must be earned. DM


Comments - Please in order to comment.

  • dexter m says:

    Finally an article that adds our private sector to SA’s corruption problem.

    • Fanie Rajesh Ngabiso says:

      This topic is a sideshow. It is a symptom, not the real problem.

      Greed is part of the human psyche, and without appropriate control it will flourish. Everywhere.

      The good news is that in South African we have the laws and legal framework necessary to manage greed.

      The real problem and the actual voter issue we all face, is the ANC’s inability or unwillingness to enforce the governance required for our society to function properly, at every level.

      So I say that the only topic to focus on in 2024 is Real Enforcement of South African Law, and we should all vote for the party that champions this.

      If we can get this one thing right, the rest of the good stuff will follow naturally.

      While you will obviously vote as you prefer, based on track record and observation, I believe the only sensible choice of party for South Africa in 2024 is the DA.

    • Fanie Rajesh Ngabiso says:

      Just a note also that in my comment above I am targeting the misdirecting nature of the subject only, not content in/accuracy.

  • Rod H MacLeod says:

    This is a stunningly inept article. The Comp Comm pursuit of the banks was based on the most flimsy hearsay evidence you can imagine. How on God’s earth do you think anyone can get 28 international banks to “fix” the ZAR / USD exchange rate? And if they do, and they all make money from it, who are they making this money from? What you clearly don’t know is that more than 70% of forex trades are money market movements – less than 30% have underlying import/export transactions. So the big losers and the big winners are the banks themselves. And the best way for them all to make money is for reserve banks to jump in and defend their own currencies’ values.

    Really, the Comp Com’s own appeals court has ruled against them on this one. And it’s not technicalities either – it’s a question of facts.

    • Steve Davidson says:

      Thanks for that RHM. This oke sounds like that other DM pseudo-intellectual Lagardien, spouting a load of rubbish about something really minor in order to (a) get his monthly quota of published articles and (b) try to put the boot into the white capitalists. And only succeeding with the first one.

  • Colin Braude says:

    I have not been following the Competition Commission investigation into banks’ forex activities so would appreciate a follow-up article on how this manipulation of one of SA’s biggest & most liquid markets was allegedly actually done?

    Was it
    inflated margins?
    or did the banks find a way to buck the long-term, ANC-caused downward trend of the ZAR, following those of GDP & employment?

    We know the ANC/EFF and their acolytes are convinced of plots, conspiracies, the Satanic West, WMC, “Stellenbosch”, et al, but feelings is not evidence.

  • Johann Olivier says:

    South African banks are truly terrible – in service & general performance &, likely are corrupt. And the rewards their CEOs receive, notwithstanding this rapacious, service-free behaviour, is obscene. That said, a recent article by the former head of COSATU, calling for a State Bank is unbelievable. Really? A State Bank? If ever there was proof that the ANC is ‘defeat-proof’, it’s this call. Not by an unsophisticated rural individual, but by a former general secretary. Has this leading light not pondered for a moment, in the face of overwhelming evidence, ‘what could go wrong?’ South African banks truly suck, but the idea of a State Bank is adding benzene to an out-of-control pyre-blaze. We’re so screwed.

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