HSBC hit with bail order
IN AN unprecedented move, banking giant HSBC has been ordered to pay à1- billion (R12.7-billion) in bail after being charged in a French criminal probe into tax evasion.
This comes three months after HSBC drew scrutiny, including in South Africa, when fresh details of clients who had accounts with the bank’s secretive Swiss private-banking arm emerged in a transnational investigation by the International Consortium of Investigative Journalists.
The “Swiss leaks” affair revealed that the HSBC unit catered to more than 120 000 clients, helping people hide à180- billion from authorities.
HSBC CEO Stuart Gulliver was called before UK legislators in February to say why the bank advised some customers how to avoid tax and helped drug cartels and arms dealers launder money. Gulliver apologised, saying the behaviour was “clearly unacceptable”. Chairman Douglas Flint said the bank was suffering “horrible reputational damage”.
Now, on Wednesday, the group was told it had been placed under a formal criminal investigation regarding its private bank’s conduct in 2006 and 2007. Five months ago, the Swiss unit was charged and ordered to post à50- million in bail.
On Thursday, HSBC said it would appeal against the decision, which was “without legal basis, and the [ à1- billion] bail is unwarranted and excessive”.
UBS Group, Switzerland’s largest bank, was forced to pay a à1.1- billion security deposit last year to cover potential penalties in a French tax-evasion probe after its appeals failed.
Judges estimated the Zurich bank helped French taxpayers hide about à9.8- billion.
In South Africa, the HSBC scandal caused waves after details of several of the 1 737 South APPEAL: HSBC plans to fight court ruling African clients, with more than R23-billion in Swiss accounts, emerged. HSBC issued a threatening warning to the Sunday Times not to disclose any of these details, demanding all files be destroyed within 24 hours. The SA Revenue Service said it was investigating, but it appeared that some people “took advantage of bank secrecy to hold undeclared accounts”, which meant they “may not have fully met” their tax obligations. — Bloomberg