At the same time Barclays looks to sell down of its African operations in attempt to cut costs, it has opened what could turn out to be a damning accusation again Absa. The group has identified potential money-laundering activities linked to forex transactions. And while it’s pure speculation, last year eleven banks were named in an investigation into alleged wide-scale rigging of forex markets. Three South African banks were named – Standard Bank, Investec and Barclays Africa. It’s nothing new as manipulation of the Rand has been whispered in local financial markets for over a decade following Barry Sergeant’s expose which sparked the Rand Commission. Barclays Africa CEO Maria Ramos says the two events aren’t linked but also that it’s too early to give any further information. Barclays was fined R10 million in 2014 after South Africa’s central bank found deficiencies in its controls to combat money laundering and terrorist financing. – Stuart Lowman
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(Bloomberg) — Barclays Plc said it has identified potential money-laundering activities linked to currency transactions at its South African business, as the British lender plans to sell down its stake in the region’s operations.
Absa Bank Ltd., a subsidiary of Barclays Africa Group Ltd., “has identified potentially fraudulent activity by certain of its customers using import advance payments to effect foreign-exchange transfers from South Africa to beneficiary accounts located in Asia, the U.K., Europe and the U.S.,” the London-based bank said in its annual report on Tuesday.
“The group is conducting a review of relevant activity, processes, systems and controls” and has made regulators aware of the of the suspected wrongdoing, Barclays said.
Barclays was fined 10 million rand ($640,000) in 2014 after South Africa’s central bank found deficiencies in its controls to combat money laundering and terrorist financing. The lender said Tuesday it will sell down its 62 percent stake in Johannesburg-based Barclays Africa over the next two to three years.
Read also: Rand forex probe may stem from whistle blower or ‘confession’
Maria Ramos, chief executive officer of Barclays Africa, said on a call with reporters that the probe isn’t linked to a wider investigation into whether banks including Barclays colluded to rig the rand and that it’s too early to give any further information.
Portuguese Probe
The bank also said the Portuguese Competition Authority is investigating whether it had infringed competition laws by exchanging information about retail credit products with 14 other banks over 11 years. Barclays said it is cooperating with the investigation.
Barclays is also among global banks being probed by the Securities and Exchange Commission and the U.S. Department of Justice in relation to its hiring practices in Asia.
Read also: Authorities launch probe into forex rigging by SA big banks
Global banks’ hiring practices have come under scrutiny after the U.S. opened an investigation in 2013 into whether JPMorgan Chase & Co. violated anti-bribery laws by employing children of China’s elite. Banks are being probed for giving jobs to candidates related to powerful Asian business leaders and government officials in order to generate business in corporate dealmaking. No one has been charged with any wrongdoing.
