HSBC admits failures after reports reveal subsidiary contributed to hide rich silver

HSBC admits failures after reports reveal subsidiary contributed to hide rich silver


Posted: 2015-02-09 1: 01 pm EST Update: 2015-02-09 1:59 pm

* HSBC admits breaches by the Swiss subsidiary

* Disclosure of documents alleged clients of the Bank helped to escape taxes

* Date of allegations of 2006-07

* Clients include music and sport stars, royalties

* HSBC says Swiss business has had since « radical transformation » (Adds Details of HSBC account holders)

By Steve Slater and Joshua Franklin

London/ZURICH, February 9 (Reuters) – British bank HSBC Holdings Plc has admitted breaches by its Swiss subsidiary in response to media reports he helped clients rich dodge taxes and conceal millions of dollars of assets.

The International Consortium of investigative journalists (ICIJ), which coordinated the preparation of reports, said a list of persons holding accounts of the HSBC in Switzerland included soccer and professional tennis, rock stars and Hollywood actors.

Reuters could not independently verify the names listed by the ICIJ. Having a Swiss bank account is not illegal and many are held for legitimate purposes.

The royalty’s list included the customer as King Mohammed of Morocco, politicians, including former Santander President Emilio Botin, who died last year, the business leaders and wealthy families, the ICIJ said. A Moroccan royal palace spokesman declined to comment.

It also States the arms dealers, people linked to the former dictators and dealers of diamonds of blood and several people on the current list of American sanctions, including Gennady Timchenko, a friend of Russian President Vladimir Putin. Group Volga from Timchenko declined to comment.

« We recognize and are accountable to the failures of conformity and control, » HSBC said late Sunday after the publication of media of the allegations concerning its Swiss private bank.

The Guardian, as well as other media, cited documents obtained by ICIJ via the French Le Monde newspaper.

HSBC said that its Swiss arm not were fully integrated into HSBC after its purchase in 1999, allowing ‘significantly lower’ standards of compliance and due diligence to persist.

The Guardian said the files showed Switzerland HSBC Bank systematically allowed customers to withdraw the « bricks » of money, often in foreign currencies that have been of little use in Switzerland.

HSBC has also marketed schemes which were likely to allow wealthy clients avoid taxes European and darkened with some to hide accounts undeclared national tax administrations, said the Guardian.

The reports sparked a political debate in Britain before a parliamentary election in May. Margaret Hodge, a member of the labour party opposition senior, said British tax authorities had done too little.

« All the other countries have raised a lot more, » she told BBC Radio Monday. « We are never quite authoritarian, aggressive enough to protect the taxpayer. »

David Gauke, a Conservative Member of Parliament and a junior Minister in the Ministry of finance, has criticised HSBC and said that the case lifted the lid on the Bank the poor behavior at the time.

« Clearly HSBC have you have questions to answer. » The behavior that is exposed in these disclosures clearly reveal behavior in 2005 to 2007 which is not what we expect of a large Bank, »he said, calling the »completely unacceptable »tax evasion.

John Mann, a labour politician, said HSBC and UK revenue office patrons must be called before lawmakers.

The HSBC customer data were provided by Hervé Falciani, a former employee of Informatics of the Swiss private bank of HSBC, said HSBC. HSBC said that Falciani downloaded details of accounts and customers at the end of 2006 and early 2007. The French authorities have obtained data on thousands of clients and shared with the tax authorities, including the Argentina.

Switzerland has accused Falciani industrial espionage and violation of the laws on the secret of the country. Falciani could not be reached for comment Monday, but has already told Reuters that he is an informer trying to help Governments to track down citizens who have used Swiss accounts for tax evasion.


HSBC said the private banking industry Switzerland, known for a long time for its secret, operated differently in the past and might have resulted in HSBC had « a number of clients who do have could not fully comply to their applicable tax obligations ».

Its private bank, in particular its Swiss branch, had suffered « radical transformation » in recent years, he said in a detailed four-page statement.

HSBC shares closed 1.6 p. 100 lower Monday, in accordance with a decline in the broader European banking index.

Swiss private bank, HSBC has been largely gained from its American acquisition of the Republic National Bank of New York and Safra Republic Holdings, a private bank.

Told ICIJ particulars of 100 000 customers were obtained more than 200 countries. He said 11 235 were based in Switzerland, 9 187 were in France, 8 844 came from Great Britain, 8 667 were in the Brazil and 7 499 of Italy.

Customer accounts held more than $100 billion, including $31.2 billion from clients based in Switzerland, $21.7 billion in Britain and $14.8 billion from $13.4 billion of U.S. customers and Venezuela said the ICIJ. (

HSBC said the number of accounts in its private bank Switzerland is much lower, however.It cannot explain the difference. HSBC said that its Swiss private bank had 30 412 accounts in 2007, which had fallen to 10 343, at the end of last year.

HSBC said that it was cooperating with the authorities investigating tax issues. In France, Belgium and Argentina, the authorities have said that they are studying.

Finance Minister Michel Sapin of France in Istanbul, said action was already underway against criminals.

« In most cases pertaining to France, investigations, trials are already running or will be initiated against all those who have defrauded the tax authorities, » he told Reuters TV in Istanbul on the sidelines of the G20 meeting.

Britain seen as difficult to achieve criminal prosecutions and the tax authorities placed emphasis on a civil action, said Minister salmi. SCIF UK said that he had brought to 135 million pounds ($ 205 million) in tax payments, interest and penalties after working through the list of the HSBC customers. ($1 = 0,6576 pounds) (Additional reporting by Tom Miles to Geneva, Mark John in Paris and Andrew Osborn in London; Editing by Keith Weir and Jane Merriman Alexander Smith)


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