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

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Footage: Evan Mawarire update from Courts earlier today (17.02.2017)

“Update from the courts earlier today. Matter has been postponed to March 16 because the state was not ready. Our resolve remains steady in uniting the citizens of Zimbabwe as we prepare for the coming season of change. #ThisFlag” (Evan Mawarire, 17.02.2017)

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

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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)

#ThisFlag: Interview with Dr. Edgar Munatsi before their strike (Youtube-Clip)

https://www.youtube.com/watch?v=9sTVGkW_OE8

Finally released Dentons report on South Africa Eskom’s performance is revealing of malpractice in the state-owned energy company!

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A long-time delayed report have been released this week, as the South African ruling party African National Congress (ANC) and their ministers has tried to subdue the private analysis of the government energy company ESKOM. However, this report will assess needed information that should have been delivered before the other leaks of questionable transactions and contracts that Eskom has done in the recent years under President Jacob Zuma. President Zuma has used his presidency to earn monies for his family members and even some of his family work in corporations that have gotten state contracts through Eskom. Therefore this report is telling of how the sufficient business-model and energy production has been handled by Eskom. This will be about the years before 2015 and to that date. What Eskom has done since has either been revealed through the contracts or through the scrutiny of Public Protector or Finance Minister who has questioned the company themselves. Just take a look at what I find as key things from this report!

“Prior to 1997, Eskom plant operated at relatively low energy utilisation factors (EUF). However, from the onset of Eskom 90:7:3 operational strategy in the mid-90s, the Eskom plant operated at higher EUFs. After 2012, the plant operational at very high EUFs with the median being in excess of 90%” (Dentons, P: 19, 2015).

About the lacking investment in older plants:

“The Generation Sustainability Strategy document cited information that Eskom has reduced planned maintenance (reflected in the Planned Capability Loss Factor (PCLF)) in order to maintain “Keeping Lights On (KLO)” strategy. It could be noted that the historical 90:7:3 strategy applied by Eskom should also be factored in the assessment of the fleet performance as international practice typically targets values in the order of 85:10:5” (…) “The historically low PCLF coupled with the KLO strategy and factors such as coal quality and high utilisation factors have led to a sharp increase in Unplanned Capabilities Loss Factors (UCLF)” (Dentons, P: 19, 2015). “The Generation Sustainability Strategy document indicates that the Eskom generation fleet has experienced 15 years of under-investment in capital expenditure (capex) which is largely the result of cost cutting due to financial and capacity constraints” (Dentons, P: 20, 2015). “The analysis of this information indicates that there was significant under-investment refurbishment capex versus best practice for an extended period of time (from the mid 1990s). The under-investment at plant mid-life age is also critical and significantly contributes to the current poor plant performance” (Dentons, P: 22, 2015).

2010 Football World Cup:

“To uphold the KLO Strategy, short term decisions were made by Eskom that negatively impacted on the long-term sustainability of the generation plant. Historically, this would include the impacts of maximising plant availability during the critical period in 2010 prior to and including the FIFA 2010 World Cup. The knock-on effects of deferring maintenance may not be immediately materialised and often manifest themselves later in the generation planning/production cycle. As an example, the available documentation indicates that in January 2013, five previous maintenance outages were not executed as scheduled as sufficient generation capacity was not available on the grid. The lack of generation reserves has also resulted in units operating outside limits of good practice. As an example, in June 2014, 46 out of the 79 coal units were operating outside of good practice” (Dentons, P:27, 2015).

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Load Shedding:

“Load Shedding is the reduction of demand to achieve a balance between available generation and demand. If demand significantly exceeds available generation and reduction in demand is not achieved, the system will frequently drop, which may ultimately result in a system black-out” (…) “The problem Eskom faces is a steady decline in the performance and availability of its coal fleet. The further leads to a lack of ‘space’ to execute the maintenance required to restore the condition of the coal-fired power stations so as to achieve acceptable operating performance. This has been compounded by the delays in bringing on new capacity such as Mepudi, Kusile and Ingula” (Dentos, P: 30, 2015).

Skills to execute new build projects:

“When the decision to proceed with the new build projects was made, Eskom had limited skills to conduct such a project. Eskom has not developed coal power plants for decades. Experienced power plant staff (mostly operational staff) were moved to new build programme which left substantial skills gaps at the operating power stations” (Dentons, P: 38, 2015).

Delayed Projects:

“One of the measures taken by Eskom to bolster knowledge and experience was to recruit experienced resources internationally to increase the skills base. Eskom recently announced revised timelines for the Medupi and Kusile indicating that these projects will be further delayed and are now only planned completion by 2020 for Medupi and 2022 for Kusile. These appear to be more realistic time frames given the current status, but there remains general scepticism as to whether Eskom will be able to achieve this given its past track record on contract management for these projects” (Dentons, P: 42, 2015).

Debt made by Eskom:

“New debt of R49.5bn was taken on in the year to fund the continued capex programme. However, Eskom was downgraded to sub-investment grade status by both Moody’s and S&P and thus the funding was provided at much higher finance cost. Liquidity concerns were heightened as the net cash flow from operating activities of R23.3bn was not sufficient to cover the total of debt due for repayment of R17.1bn as well as the net financing interest payable of R15.3bn resulting in a shortfall of R11bn. In essence borrowings were starting to be used for ongoing operations” (Dentons, P: 89, 2015). “Eskom Treasury recently highlighted the key risks that Eskom faces to execute the borrowing programme, and in turn therefore complete the new builds: realisation of BPP cost savings; cost overturns on Medpudi and Kusile; RCA cost recovery in MYPD3 future years; Declining future ratios; threat of future ratios; threat of further credit rating downgrades; inadequate liquidity buffer; Lack of market appetite for Eskom debt; and inability to execute borrowing programme. In FY2015, all of these risk materialised” (Dentons, P: 94, 2015). “Recent history does not place these risks in a good light. Eskom is currently sacrificing its future to survive. If sales and arrears continue to plague Eskom, there is a shortfall in lending, a failure to meet meaningful cost savings, and a continued EAF below 80% prevail (in other words a continuation of the trend of the past 2 years), Eskom’s bail-out funds will evaporate” (Dentons, P: 95, 2015).

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That this report is damaging to the reputation of Eskom. This shows the malpractice and lacking of guidance that the company has had. The monopoly and grand control over the market as the state corporation has given it kickbacks and security of funds, even as they haven’t done things properly or planned. Therefore the enlightenment and the clear indication of lose planning and less of experts on the field of building new power-plants is proof of the misguided and maladministration that’s been inside the Eskom company.

The African National Congress that has been the ruling regime and the ruling party, that has been in-charge of the resources and the selection of hiring and changing leaders of the company. Can be put to blame for lenient and lacking acts of putting in place enough expertise and enough clear procedures on how the changing leadership should go about. So the Eskom could be sure of having men and woman who we’re qualified and had experience to handle an organization and business like this.

The report highlights major facts and breaches in also ordinary buying procedures and lacking of that and other issues that I couldn’t fit. There are many lose ends that Eskom has and needs to address, that ANC has to take responsibility for and also answer for. Because the Company has dwindled and lost its edge during the reign of ANC and President Zuma, who rather spoils the company instead of investing in it! Peace.

Reference:

Dentons – ‘Report on Eskom’ (02.07.2015)

Zimbabwe: Urgent Notice- “To: Zimbabwe Hosptial Doctors Association Members” (10.02.2017)

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#ThisFlag: Evan Mawarire – “I’m so glad to be back home in Zimbabwe where I belong” (Footage)

“Thank you for your support and for speaking out for Zimbabwe. None of us should ever be intimidated into silence. This is our home and we have the full right to participate in making it a better country. Like we said in the beginning, HATICHADA, HATICHATYA! ASISESABI njalo ASISAFUNI! FED UP & NOT AFRAID!” (Mawarire, 10.02.2017)

#SONA2017: Mmusi Maimane speaks to the media outside Parliament after walking out (Footage)

#ThisFlag: “Free at Last to the sound of lying ministers!” (09.02.2017)

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#ThisFlag: Pastor Evan Mawarire in Chikurubi Prision (05.02.2017)

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