The Financial Services Board (FSB) has confirmed it is investigating some foreign exchange futures contracts, amid suggestions they were made by people who knew that former finance minister Pravin Gordhan was going to be called back from London by President Jacob Zuma and that he would then fired.
Rob Rose, Editor at the Financial Mail magazine spoke with Midday Report host, Stephen Grootes about this.
I think they should take these seriously because there were lots of rumours doing the rounds back in 2015 when Nhlanhla Nene got fired that certain people profited from the rand's fall against the dollar at the time.— Rob Rose, Editor at the Financial Mail magazine
Rose says there were certainly people who did have advance knowledge that Pravin Gordhan would get fired. Anonymity given by the volumes of foreign exchange traders makes it easier for people to make money from such advance information, he adds.
The JSE for example has an oversight over certain foreign exchanges futures contract. They also have oversight over some of the exchange credit funds.— Rob Rose, Editor at the Financial Mail magazine
Rose explains that bank shares fell tremendously in the week after Gordhan was fired. In the case that involved Nene, a whistleblower came forward and said advanced knowledge was held by a few people and some companies then traded on this.
He emphasises that this is something authorities need to take seriously and investigate.
Listen to the full interview in the audio below:
This article first appeared on 702 : FSB will investigate insider trade claims around benefits of currency