HSBC and Standard Chartered face £400m fraud probe

TWO of Britain’s largest banks face corruption probes after being accused by former Cabinet minister Lord Hain of money-laundering in South africa.

HSBC and Standard Chartered face investigations over their alleged role in laundering £400m linked to the controversial Gupta family.

Labour peer Hain named the pair among several lenders which are alleged to have facilitated a gigantic bribery scandal gripping South africa.

The Guptas are accused of exerting enormous influence on president Jacob Zuma, and undermining the rule of law to make themselves rich, with some of the City’s biggest names dragged into the crisis.

It has destroyed City spin firm Bell Pottinger, forced out a string of senior staff at accountant KPMG and triggered an apology from consultancy McKinsey.

Hain, a former anti-apartheid campaigner born in Kenya, wrote to Chancellor Philip Hammond urging him to investigate.

He said a ‘transnational moneylaundering network’ had enabled ‘corruption and cronyism, plundering taxpayer resources on an industrial scale’.

The peer said: ‘Several Standard Chartered US dollar accounts in Dubai were used by the Gupta network to launder the proceeds of their illicit gains.’ He added that much of the cash seemed to have passed through the United arab emirates and Hong Kong.

‘In both these jurisdictions, two of the UK’s largest financial institutions – Standard Chartered and HSBC – have their biggest footprints,’ Lord Hain said.

‘experts I have talked to cannot see how they will not have been exposed to this network.’

Hain also included a list of people and companies linked to the family, and urged UK finance firms to urgently check if they provided any services to them.

Hammond said that the Government took such corruption claims very seriously and that he had passed the letter to the Financial Conduct authority, Serious Fraud Office and National Crime agency.

In the House of Lords yesterday, Hain also identified Indian lender Baroda Bank as a possible money launderer. He said he had written to european Commission president JeanClaude Juncker about several banks on the Continent which he feared could be involved.

The scandal is a fresh blow for HSBC, which is hoping to put a string of corruption cases behind it when new chief executive John Flint takes over next year.

Standard Chartered – which was fined £ 187m in 2012 for breaking sanctions against Iran – is also trying to clean up its act. HSBC declined to comment. a Standard Chartered spokesman said: ‘We are not able to comment on the details of client transactions but can confirm that, following an internal inves- tigation, accounts were closed by us in 2014.’

None of the Guptas, who have denied any wrongdoing, are thought to have opened accounts in their own names.