Breaking News: Competition Commission reaches settlement with Citibank N.A. for colluding (20.02.2017)

Today, the Competition Commission has filed with the Competition Tribunal, a settlement agreement reached with Citibank N.A. for being part of the forex trading cartel.

The Commission found that from at least 2007, Citibank N.A. and its competitors had a general agreement to collude on prices for bids, offers and bid-offer spreads for the spot trades in relation to currency trading involving US Dollar/Rand currency pair. Further, the Commission found that Citibank N.A. and its competitors manipulated the price of bids and offers through agreements to refrain from trading and creating fictitious bids and offers at particular times.

Citibank N.A. will pay an administrative penalty of R69 500 860 (Sixty Nine Million Five Hundred Thousand Eight Hundred and Sixty Rands). This figure does not exceed 10% of Citibank N.A.’s annual turnover in the Republic of South Africa. Citibank N.A. undertook to cooperate with the Commission and avail witnesses to assist the prosecution of the other banks that colluded in this matter.

On 15 February 2017, the Competition Commission referred a collusion case to the Competition Tribunal for prosecution against Bank of America Merrill Lynch International Limited, BNP Paribas, JP Morgan Chase & Co, JP Morgan Chase Bank N.A, Investec Ltd, Standard New York Securities Inc., HSBC Bank Plc, Standard Chartered Bank, Credit Suisse Group; Standard Bank of South Africa Ltd, Commerzbank AG; Australia and New Zealand Banking Group Limited, Nomura International Plc., Macquarie Bank Limited, Citibank N.A., ABSA Bank Limited (ABSA), Barclays Capital Inc, Barclays Bank plc (Respondents).

“This settlement was done to encourage speedy settlement and full disclosure to strengthen the evidence for prosecution of the other banks,” said the Commissioner, Tembinkosi Bonakele.

Ends.

For more information or for media enquiries, please contact:
Sipho Ngwema, Head of Communications
012 394 3493/ 078 048 1213/ SiphoN@compcom.co.za

Black First Land First march to the South African Reserve Bank (19.02.2017)

Public Protector’s preliminary report found that ABSA illegally benefited from apartheid cash injections from the South African Reserve Bank.

JOHANNESBURG, South Africa, February 19, 2017 – On Friday, the Black First Land First (BLF) movement marched to the South African Reserve Bank (SARB) (APO.af/JsJaEi) to demand that the institution act on the Public Protector’s preliminary report which found that ABSA illegally benefited from apartheid cash injections from the SARB.

BLF joined the ANC Youth League (ANCYL) recently in a march to ABSA headquarters (APO.af/Y21xVq) to demand that #ABSAmustPay. The Public Protector, Adv Busisiwe Mkhwebane, found that ABSA should pay R3.2 billion.

BLF said they wanted the SARB to take seriously and act on findings of the CIEX report, which investigated money stolen during the late stages of institutionalised apartheid. The report found that R26 billion could be immediately recoverable.

The aim of the march was to also implore the SARB to punish corrupt banks, ABSA, Standard Bank and Investec, which the Competition Commission found (APO.af/VsZ1A9) had manipulated and fixed the rand/dollar price.

South Africa National Treasury statement on Competition Commission finding on the Banks (16.02.2017)

The South African Banks under review for having price-fixed their currency exchange in secret inside deals!

In the nation under President Jacob Zuma and African National Congress (ANC) there been done some shady dealings between government and private industry, this has been happening over years. Now the Financial Market and Banks have internally been agreeing on values and exchange rates on the South African Rands (ZAR), this is a luxury where the banks have set fixed prices and values. That in the end has given profits and sold the Rand on the open market. This in mind with the fixing and securing more profits for the banks as they we’re trading the currency on the open market. Also, to foreign investors and currency traders that try to make a profit on exchange and selling currency back again at a later date.

So this sort of financial manipulation has made sure for the 17 banks that have made agreements between the banks and communication that most likely paid more for the rand or more used more dollars for getting the South African currency. As proven with the statements of the Competition Commission and the South African Reserve Bank, however, the trial and the review will continue to shed light on the possible internal-trade in the financial business of the Republic.

The opening of review of Forex exchange of the Rand:

“The Competition Commission has today referred a collusion case to the Tribunal for prosecution against Bank of America Merrill Lynch International Limited, BNP Paribas, JP Morgan Chase & Co, JP Morgan Chase Bank N.A, Investec Ltd, Standard New York Securities Inc., HSBC Bank Plc, Standard Chartered Bank, Credit Suisse Group; Standard Bank of South Africa Ltd, Commerzbank AG; Australia and New Zealand Banking Group Limited, Nomura International Plc., Macquarie Bank Limited, ABSA Bank Limited (ABSA), Barclays Capital Inc, Barclays Bank plc (Respondents). The Commission has been investigating a case of price fixing and market allocation in the trading of foreign currency pairs involving the Rand since April 2015. It has now referred the case to the Tribunal for prosecution. The Commission found that from at least 2007, the respondents had a general agreement to collude on prices for bids, offers and bid-offer spreads for the spot trades in relation to currency trading involving US Dollar / Rand currency pair. Further, the Commission found that the respondents manipulated the price of bids and offers through agreements to refrain from trading and creating fictitious bids and offers at particular times. Traders of the respondents primarily used trading platforms such as the Reuters currency trading platform to carry out their collusive activities. They also used Bloomberg instant messaging system (chatroom), telephone conversation and had meetings to coordinate their bilateral and multilateral collusive trading activities. They assisted each other to reach the desired prices by coordinating trading times. They reached agreements to refrain from trading, taking turns in transacting and by either pulling or holding trading activities on the Reuters currency trading platform. They also created fictitious bids and offers, distorting demand and supply in order to achieve their profit motives” (CompCom, 2017).

South African Reserve Bank statement:

“The South African Reserve Bank (SARB) has noted today’s announcement by the Competition Commission South Africa (Competition Commission) that it has completed its investigation initiated in April 2015 and has referred to the Competition Tribunal for prosecution a case of price fixing and market allocation in the trading of foreign currency pairs involving the South African Rand (ZAR)” (…) “The rand is a globally traded currency. Some 30.0% of daily turnover in the ZAR takes place in South Africa, and turnover with non-residents accounts for 57.5% of domestic turnover. Figures published by the Bank for International Settlements indicate that for the month of April 2016, the daily average worldwide turnover in the foreign exchange market involving the ZAR was approximately USD49.0 billion. This represented 1% of total turnover in the international foreign exchange markets” (…) “The SARB sees the allegations in a serious light. The SARB will allow the legal processes now initiated to run their course, and will continue to monitor developments closely to inform any action that we may need to embark upon in accordance with our mandate and jurisdiction” (SARB, 2017).

So we can now wait and see what the efforts and effects. If this can hit the currency and its value, if this has been a fix to juice it up or even put in a bubble where the banks has earned profits on illegitimate transactions as the communications between the banks has set standards of the prices and expenses, so the costumers and businesses has overpaid for the currency in trading. This proves that the greed and coins goes together. The banks of South Africa ceased an opportunity and grasped it.

We have to see when the Competition Commission of South Africa releases their report and their conclusions as the review and the findings of colluding will be put in court. However, the world gets to see the internal trading and agreements between the banks to fix the prices of currency, especially the value of the South African Rand (ZAR). Therefore the release of information on how they fixed it and how they speculated on it, will show how banks did this. Trust this, the report and the papers on this financial transactions and agreements will be juicy and show the inner-works of the banks. That is knowledge that the Republic of South Africa deserves, as these people and professionals are the ones making sure the monies are used and taken care off. Peace.

Reference:

South African Reserve Bank – ‘SA Reserve Bank Notes Competition Commission Decision’ (15.02.2017) link: https://www.resbank.co.za/Lists/News%20and%20Publications/Attachments/7681/SARB%20statement%20on%20Competition%20Commission%20announcement.pdf

The Competition Commission South Africa (CompCom) – ‘Breaking News: Competition Commission prosecutes banks (currency traders) for collusion’ (15.02.2017)

Opinion: Zimbabwe’s Government troubles with the West, but easy accessible with the Chinese

“No, I don’t care about that, the international — what they decide is entirely their own affair — their own affair. I’m concerned about Zimbabwe, and I’m concerned about the lives of the people of Zimbabwe. And don’t forget, it was my party which brought democracy into the country. I fought the British. We had to fight the British for democracy for one man, one person, one vote” – Robert Mugabe (Amanpour. 24.09.2009 interview – CNN).

There are these days that vicious attacks from President Mugabe will be normal, where the words of oppressive colonial attacks on Zimbabwe will be addressed with flowery perfection from the old-timer, the long-running President of the Southern African Nation of Zimbabwe, the country he have had in his hands since the Lancaster Agreement and the release of the Country from the British Colonial.

At one point he we’re acting more British than African, but with the Age, he has more and more hated the Europeans and Americans, as their respect for the leader have dwindled. The Respect has fallen as much as the respect for a McDonalds Burger has gone down in the West.

He we’re the man at one point, until the Aparteid of South Africa went sour and his gold-star got taken away. After that he must felt betrayed as he was the man of the continent and the man who even we’re knighted by the United Kingdom at one point and even a candidate for the Nobel Peace Prize in 1991. So the rich history of the man and ruler is vast. My words and reasoning will be belittling the histories and the vicious need for power the man have.

Though there vast amounts of irony from the leader, that is now clear as the sun is setting and rising again. Just as he has blasted the West, had have land-reforms exiting the White farmers and their plantations as they we’re the grand issue of the land. Surely there we’re in-balance between the ‘Africans’ and the ‘Afrikaans’; which is well-known as the British and the Dutch settlers took the best land and let the ‘locals’ become workers and renters. It was natural for anyone who lead to wish for a difference and create a better life for more citizens of Zimbabwe. Though the technic of giving ZANU-PF Elite the best land and evict landowners that have run farms for generations without compensations is just critical; though the colonial powers stole the land, there are ways of punishing the generation for the sins of the for-fathers while still trying to mend on the insufficient systems of the present day. Something that is lost tale and lost option as brutality have become the station of Mugabe, ever since he got his Army and Police trained by the North Koreans. As long as he got rid of his worst opponent in Joshua Nkomo and even raided and massacred the loyalist in the Matabeleland.

With this history and with his reign of power; all of these initial acts of violence and the control of the state; that he has exhausted the state and the economy, while blowing the donor funding from the West and later when they quit funding his oppressive regime. Saying it was colonial acts of belittling African Nation, while he himself was harassing people and detaining opposition of ‘Movement for Democratic Change’. Even at one point accepting the power-sharing agreement made by Thabo Mbeki, though partial and used by Zuma to overpower him in South Africa, the last stain on Mbeki; we’re the weak agreement that gave the Executive back to the loser Mugabe in 2008, while the winner got the VP Tsvangirai. So the tried peaceful transition to another leader was not successful and a reason why the 92 year old man is the king-pin of the Republic Zimbabwe.

“I think in relation to sport, we set out the position many, many times, but nothing that happens in relation to that should take anything away from our total condemnation of the way that Robert Mugabe is making the plight of the people in Zimbabwe terrible. Now whatever issues there are to do with sport, you can put those to one side for a moment, the issue is how do we make sure that we put the maximum pressure on Robert Mugabe’s regime in order that we change the situation in Zimbabwe and change it for the better politically, but also in humanitarian terms as well. And I totally agree with what Prime Minister John Howard was saying just a moment or two ago. There are no grounds, so far as we can see, for saying that there has been any significant progress at all, indeed if anything the situation has got worse, and that means that we have got to keep up maximum international pressure upon the regime” – Prime Minister Tony Blair (Jon Howard Interview at Joint Press Conference with PM Howard of Australia, 07.05.2003).

So that he blames the West and address the West for the shortcomings is natural, but the Economic instability is not all on the Western Sanctions, as that is also because the ZANU-PF, the Benzes bought under the ZANU-PF elite while the schools depleted, the civil servants delayed salaries, the missing of foreign exchange and dollars in the country are run-out. There are reasons as the nepotism, the unstructured business, the export and the agricultural inefficiencies together with draught and all the weak governance that creates deficiencies and devalued the economy. There are reasons for the economy crashed as the empty coffers while the elite was eating elephants and entertaining the Luxury Hotels in the Honor of the President Mugabe latest birthday. So there is money, but they are spent on truffles for the President, instead on citizens and services for the public. That is not the fault of the Western that he claims, together with reforms and not institutions, but instead all centralized in the hands of President.

That is from the same man who has put his hate on the West, as they are sanctioning the Zanu-PF regime and Mugabe long-term reign of the Nation. The same man who have said anything possible about the Americans and British, the man who has claimed that they are the reason for all the troubles, have no quarrel this year and of recent years traded with the Chinese government and their national companies. Like there 128 development projects from 2000 – 2012 made by the Chinese in Zimbabwe. While the Zimbabwean Government have also planned to go from US Dollar to Chinese Yuan (was planned in 2015) as the official currency as the Mugabe regime is more in the pocket of the Chinese, than everybody else (Archdeacon, 2016).

This is also a way of Chinese to grade their power and take more control on the African Continent, as the Zimbabwean have such a monetary fiscal issues that anybody who will clear debt and will drop fresh coins to the regime is friend, especially when there only optional to let the Chinese work and build there; as a way of renting the country away, while the Elite eats the money. Something the country wished the IMF would let them do, but since they are Western, French and even US Dollar fueled they are not as willing as Beijing, therefore Mugabe will easily play kind Uncle Bob, while blasting the West, which is a good luck for the Zimbabwean Government. Though we know and they know, they would easily said ‘YES’ to the loans from the International Monetary Fund.

So the hatred towards the once who was the allies and friends, like he was once so proud of English culture and being knighted, the man who once was their ally and turned into a villain, the question if he was a needed villain for the British, as he fought their colonial rule under Smith Government in Rhodesia and made the new state Zimbabwe. Which was a feat and was something that people could look up-to, when he surged the power he consoled it by all means and even ended lives to keep it; this what happen to Nkomo and to the once that he used the military on, as they we’re not loyal to him; instead to the Opposition that wasn’t him. That is why it is ZANU-PF, as they we’re two parties to take control over and even consolidated with all ways. The same he has done with the state and therefore the disarray and the economic instability, therefore the stop of using own currency and American Dollar together with the newly planned transition towards the Chinese Yuan.

There are an issue and aggression from Mugabe towards the West, he has fought them all his life, but also had a an admiration for it, as he would easily wear Western clothes and import expensive westernized products, as his wife spends the government funds there and not in Beijing, even if the government gets the funds there and development projects from there now, as the IMF and other does not offer the sanctions nation with fiscal financial subsidizes and loans. Peace.

Reference:

Archdeacon, Olivia – ‘China buys its first African colony for a meagre $40 million’ (15.01.2016) link: http://capx.co/china-buys-its-first-african-colony-for-a-meagre-40million/

One Year In Office: Buhari Says Insecurity, Corruption Were Inherited (Youtube-Clip)

Besigye defends continued defiance campaign despite Deputy Chief Justice Kavuma’s court order (Youtube-Clip)

“The former Forum for Democratic Change presidential candidate, Dr.Kizza Besigye, has spoken out in defence of his campaign of defiance after the police moved to block him from going to the opposition party’s offices at Najjankankumbi to attended prayers organised as part of protest against the results of February Presidential elections” (NTV Uganda, 2016).

Freighting numbers from the Bank of Uganda released now right before this election season.

Well, we are in the middle of election hiatus and all, the Nomination and planned campaign that last to 18^th February 2016. This here will not be on that, but be crunches numbers delivered from the Bank of Uganda Yearly report for the 2014/2015 budget year. This here will tell what I see as important from that report.

“The external position weakened with the current account deficit excluding official grants deteriorating to 11 percent of GDP compared to 8,8 percent in 2013/14. The deterioration of the current account deficit was largely driven by the services deficit, which deteriorated to US$ 731 Million in 2014/15 from USD 323 million in 2013/14 mainly account of higher payments  of government services related to infrastructure projects, particularly Karuma and Isimba Hydro Power Projects” (BoU P:1).

That is big change in deficit! That must be a bit worrying that the amount of monies is becoming this big. Also with the infrastructure projects makes so big hunch of that deficit.

“Financial Risk:

Financial risk management at Bank of Uganda focuses on the risk exposures in both the foreign exchange reserves portfolio as well as other operational areas of the Bank. Notably, foreign exchange reserves account for over 86 percent (2014: 74 percent) of BOU’ assets” (BoU, P: 12).

A lot of foreign exchange is major parts of the reserves of the bank. Is that a safe way to do it and doesn’t that devalue its own currency?

“The higher than programmed expenditure was partly, compensated for by the over performance in government revenue. Total government revenue, including grants amounted to UGX. 10,866.0 Billion, which has higher than target by UGX. 249.1 Billion. Grants and domestic revenues over performed by UGX. 173. 0 Billion, respectably” (BoU, P: 28).

The good news is that Government is able to collect more revenue as of taxation and grants to the Government. Though we can say it is a steady rise and the bank doesn’t explain how the rise happen, because this can’t all be collected on the Cellphone, Alcohol or VAT taxes, but something else.

“The fiscal deficit of UGX 3,621 Billion was financed by both domestic and external source, which amounted to UGX. 2,479.0 Billion and UGX. 919 billion, respectively. Domestic financing included a drawdown on savings amounting to UGX. 1,060.0 Billion and net issuance of Government securities of UGX. 1,386.0 Billion. The drawdone of savings was specifically used to finance expenditures related to the public infrastructure projects” (BoU, P: 29).

This here continues on how the financed and the fiscal deficit and sure the drawdone on the savings to build infrastructure projects.

“Public Debt:

The total public debt stock, in nominal terms, at end June 2015 is estimated at UGX. 24,242.0 billion, an increase of 24,2 percent of UGX. 19.518. 0 Billion at end of June 2014. External and domestic debt increased by 27,7 percent and 21,1 percent, respectively” (BoU, P: 29).

This here is frightening how much the rise is steady and getting more… The terms of it and the rise should make people shake their heads and worry.  The Government of Uganda continues to hedge the Public loans and having a rise like this can’t be a sign of a healthy economy.

“Exchange rates:

The depreciation pressures which started in early 2014 continued through June 2015, with the Shilling depreciating by 18,8 percent year-on-year on a trade weighted basis and by 29.1 percent against the USD to an average mid-rate of UGX. 3,398,49 per USD” BoU, P: 31).

That the currency loses value towards the dollar should also be worring. When you see how much shillings you need now to get the dollar now.

“Petroleum Revenue Investment Fund:

In June 2015, the Government opened two accounts (UGX and USD) in order to operationalize the PF. These accounts are to receive all oil related revenues. In June 2015, USD 36 million was received as part payment of the USD 250 million capital gains tax (CGT) liability from Tullow. This sum includes USD 142 million received in 2012 and USD 108 million to be paid in three equal installments of USD 36 million in 2015, 2016 and 2017” (BoU, P: 45).

“During the year, an amount of UGX 1,607,814 million was transferred from the Oil Tax Revenue  Fund to Uganda Consolidation Fund. This balance relates to an amount of UGX 1,161,737 million from Tullow Oil paid to GOU for the settlement of tax dispute between the Government and Heritage Oil & Gas (U) Limited. It also includes stamp duty of USD 171 million (UGX 447 million) on sale of Tullow Oil’s assets to Total and CNOOC” (BoU, P: 107).

“In addition, the bank received USD 36 million (UGX 119,057 million) on 22 June 2015 on behalf of GoU, relating to Tranche 1 Tullow Oil tax settlement” (BoU P: 107).

“Ugandan Consolidation Fund refers to the Government appropriation account where all tax receipts are credited and appropriations made. During 2014/15, UGX 1,612,080 million relating to the oil tax revenue collections was transferred to the UFC” (BoU, P: 107).

As seen Petroleum Revenue Investment Fund and Oil Tax revenue shows how the oil impact has on the economy. We can also see the result of the longstanding dispute of the Government of Uganda and Tullow Oil Company. That has now been overturned and gotten the Total and CNOOC. There will be more monies at stake on a later stage coming with the found oil in the Bunyoro area and Lake Albert.

Presidential Airplane:

“The special loan to government relates to an advance to government for procurement of the presidential aircraft with interest rates (LIBOR plus 100 basis points), maturity date and repayment terms agreed between Ministry of Finance and the Bank as stipulated in the memorandum of understanding. The last loan instalment was paid off on 24 July 2015” (BoU, P: 107).

That was an expensive airplane for the president! Though it’s all back-paid this still shows how the President buys what he needs and wants, and not what the people need.

Uganda Consolidation Fund: (by the 31. June of the year)

2014 it was UGX 3, 245,961 million.

2015 it was UGX 2, 386,056 million.

(BoU, P: 117).

As proof with the rising debt and deficits, even with rise of higher taxs returns the Government of Uganda. Stills shows that their spending more than they getting since the Taxation fund is dwindling and become less and smaller account. That in total with the other numbers should be a worrying thing to see. Especially knowing how the NRM-Regime goes mayhem on the economy the coming months of elections paying for every votes with chickens and goats in the districts. We have seen that before and will see it again. This will also lead to rise of inflation with more running through the economy so the value of the currency might also dwindle towards on dollar. Wouldn’t be surprised if the Shilling comes up to 4,000 on a dollar!

And that is not a good luck, since the imports and prices will rise for the rise of cost of imports. But hope my predictions isn’t correct, but election cycles usual make the ordinary voter pay and those receiving just get a patch on the wound created by the mayhem done to economy by the ruling regime. Peace.

Reference:

Bank of Uganda (BoU) – Annual Report 2014/2015