The Competition Commission has suffered a significant blow in its decade-long legal challenge seeking to prosecute major South African banks in a novel case of currency manipulation.The Constitutional Court delivered a judgment on Tuesday effectively setting free the banks, including the country’s largest, Standard Bank.The case stems from the commission’s decision to prosecute 28 banks, including South African and foreign banks which, the commission alleged, colluded and conspired with each other to manipulate the foreign exchange rate in respect of the US dollar and the South African rand to their own benefit.In 2017 the commission initiated the legal battle against banks on the basis its investigations found local and international banks colluded to co-ordinate rand-dollar trading, with some participating in an instant chat room dubbed “ZAR Domination”. It recommended fines of up to 10% of each bank’s SA revenue, but the case faced pushback from foreign banks on the grounds of jurisdiction, while local banks contended the commission had no evidence to prosecute them.In a majority judgment, penned by justice Owen Rogers, the Constitutional Court effectively dealt a blow to the commission’s plans to prosecute South African banks.The commission’s appeal against most of the banks failed, including Bank of America Europe Designated Activity Company, Australia and New Zealand Banking Group Limited, Standard Bank of South Africa, Nomura, Commerzbank, Macquarie, HSBC Bank USA NA, Merrill Lynch Pierce Fenner and Smith Incorporated, Bank of America NA, Nedbank and First Rand Bank.This means major three South African banks, namely Standard Bank, Nedbank and First Rand,implicated in the saga will walk free. The commission’s appeal partially succeeded in the case of JPMorgan Chase Bank and Standard Americas Incorporated. The commission will also not be able to prosecute Credit Suisse Securities. The Swiss investment bank won in its appeal challenging the commission’s decision to join in it in the litigation. The commission will be able to pursue the case against multinational banks BNP Paribas, JPMorgan Chase Bank, HSBC Bank and Standard Americas Incorporated.The commission’s legal representative, advocate Tembeka Ngcukaitobi, in appealing the Competition Appeal Court’s ruling, which limited prosecutions to four global entities, advanced argument that the banks’ conduct “weakened the rand” and continued to negatively affect the country’s imports and exports of dollar-denominated products amounting to $2-trillion. The commission’s case was based on incorrect factual assumptions and lacked the necessary evidence to justify any further legal proceedings against Standard Bank. Standard Bank said it was pleased with the outcome. “The judgment affirms the consistent position maintained by the bank since the inception of this matter in 2017 and throughout these proceedings, that neither Standard Bank nor any of its employees was involved in a conspiracy to manipulate the rand,” the bank said. “Standard Bank affirms it conducts its business with integrity and in full compliance with all applicable laws and regulations. Standard Bank will continue to play a constructive role in South Africa’s financial markets and in supporting growth throughout the South African economy.”