HSBC’s dirty lit­tle se­crets

Finweek English Edition - - IN THE NEWS - BY TINA WEAVIND

The de­tailed ex­po­sure in re­cent weeks of tens of thou­sands of ac­counts lodged at the Swiss sub­sidiary of Bri­tish bank­ing gi­ant HSBC has un­cov­ered se­cre­tive fi­nan­cial ac­tiv­i­ties of some 120 000 clients

part f rom it s choco­lates and ex­pen­sive ski re­sorts, Switzer­land is prob­a­bly best known for its ex­cep­tion­ally dis­creet banks such as the HSBC, which has branches in 74 coun­tries.

But all that changed in 2007 when Hervé Fal­ciani, t he bank ’s for­mer com­puter spe­cial­ist, pulled off one of the most dra­matic heists in his­tory. Fal­ciani f led to Le­banon with a data­base of 120 000 en­crypted f iles and tried to sell the data to var­i­ous bankers. His plan went awry and news of the theft reached Switzer­land.

De­spite Switzer­land ’s pleas for ex­tra­di­tion, Spain and France have pro­tected him be­cause of the value of his in­for­ma­tion, which has re­sulted in nu­mer­ous tax eva­sion in­ves­ti­ga­tions and pros­e­cu­tions.

The files were first leaked to French news­pa­per Le Monde; then to the In­ter­na­tional Con­sor­tium of In­ves­tiga­tive Jour­nal­ists – a net­work of jour­nal­ists around the world who ex­posed the list of names last week.

The doc­u­ments show that ter­ror­ists, tax evaders, drug car­tels, cor­rupt arms deal­ers and blood di­a­mond traders all made full use of the bank’s (for­mer) se­crecy poli­cies to laun­der and hide money.

Records de­tai l t r a ns­ac­tions of more than 120 000 peo­ple from 203 coun­tries, in­volv­ing $119bn (R1.3tr). Of t hese, 585 were South African with a to­tal of $2.09bn tucked away at HSBC. This in it­self is no in­di­ca­tion of wrong­do­ing – it is legal to hold a Swiss bank ac­count as long as reg­u­la­tions are ad­hered to and the cor­rect taxes are paid.

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