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On Tuesday, the Constitutional Court unanimously dismissed part of the Competition Commission's appeal in a rand-rigging case, permanently clearing Standard Bank, Nedbank, FirstRand, and several other local banks of allegations that had hung over them since 2017. The case against six international banks, including JPMorgan Chase & Co, JPMorgan Chase Bank, HSBC, Investec Bank, Standard Americas Incorporated, and BNP Paribas may proceed.

The Competition Commission claimed that 28 international and local banks had colluded to fix the United States (US) dollar and rand exchange rate. In practise, what the Commission alleged, is that bankers had got together in secret chatrooms to conspire about when and how they would buy or sell the local currency, and that the effect of this was, to manipulate its value for which ordinary South Africans paid the price.

The case had for a better part of a decade, bounced between the Competition Tribunal and the Competition Appeal Court, before ending up in front of the Constitutional Court.

Justice Owen Rogers, writing for the Court, found that with regard to the local banks the Commission's case rested on flawed factual assumptions and never established the evidentiary link needed to prove those banks were part of a single overarching conspiracy.

The international banks based their defence on an argument about jurisdiction, which the court dismissed. Judge Rogers ruled that physical boundaries were irrelevant in modern global finance.

The country's competition regulator has spent almost a decade, and an unknown quantity of taxpayer and litigant money, prosecuting a conspiracy theory it could never plead properly.

The Commission's original 2017 referral to the Competition Tribunal alleged that local and international banks colluded to manipulate the dollar/rand exchange rate between 2007 and 2013, coordinating through electronic chatrooms, fixing bid-offer spreads, and timing trades.

Instead, the Constitutional Court found the Commission could not even clear the threshold question of whether, assuming every one of its allegations were true, a reasonable Tribunal could conclude a case had been made out. That is about as low a bar as a prosecuting authority can be asked to clear, and the Commission still tripped over it.

The court also found the Commission botched the basic procedural mechanics of the case. It tried to add banks as respondents after the referral to the Tribunal had already been made, without ever validly initiating a complaint against them first. Rogers said the Commission had failed on a basic point of law.

Standard Bank has confirmed, following the ruling, that it will pursue costs against the Commission and the National Treasury.

The likelihood is that certain bankers did conspire to manipulate the value of the currency. But that the Competition Commission partially botched its strategy in alleging a single overarching conspiracy and then making some further factual mistakes and basic errors of law. To a certain extent, this may have been a consequence of ideological zealotry on the part of South African officials, who saw a grand conspiracy amongst banks, when in practise, the actual offence was not quite as centralised as that.

When a regulator loses this comprehensively, the account is settled by the state, which is to say by the taxpayer, because a public body could not do the basic legal spadework before making one of the largest cartel allegations in South African corporate history.

The Competition Commission has statutory power, a dedicated budget, and a mandate that South Africans broadly support: nobody wants a cartelised banking sector rigging the currency behind closed doors. But the Competition Commission failed badly in this case.