The UK government insisted yesterday that ministers did not know the full facts about the HSBC tax scandal until this week, in a collective closing of ranks in parliament and in British financial services.
"No government minister had any knowledge that HSBC may have been involved in wrongdoing in regard to its Swiss banking arm prior to the reports of the last couple of days," a spokesman for David Cameron, the UK prime minister, said.
The spokesman said this assertion applied to all ministers, including Lord Green, who served as trade minister in the coalition from 2011 to 2013.
Lord Green was chief executive and chairman of HSBC from 2003 to 2010, which includes the period when its Swiss private bank allegedly colluded with clients to conceal “black” accounts from tax authorities. Lord Green has declined to comment.
He was at the helm of HSBC when the bank unsuccessfully tried to use the French courts to prevent the transfer of data revealing alleged tax evasion by its clients to the British tax authorities.
The data – taken by a former bank employee – was passed on by French authorities to the British in 2010.
HSBC said at the time: “We are doing all we can to protect the interests and confidentiality of our clients.”
The UK government later yesterday qualified its position, saying ministers were not told by the tax authorities about any alleged wrongdoing by HSBC.
Unaware of allegations
Despite a spate of 2010 media reports about alleged tax issues at HSBC’s Swiss operation, Mr Cameron’s spokesman insisted the prime minister was unaware of the allegations against the bank when he ennobled Lord Green and made him a trade minister in 2011.
Meanwhile, Martin Wheatley, head of the watchdog that regulates bank conduct, told members of parliament he was "not aware" the Financial Conduct Authority had been told of specific claims of collusion in tax evasion involving HSBC.
Andrew Tyrie, chairman of the Commons Treasury committee, said: "I find it extraordinary that the FCA was unaware of the HMRC investigation."
Mr Wheatley said it would be the task of the bank’s monitor – appointed by the FCA and US authorities after the bank was fined $1.9 billion in 2012 for money-laundering – to examine the tax allegations with HSBC executives.
The UK government set up an information-sharing committee for agencies that investigate financial crime after the last election, but Mr Wheatley said tax authorities did not use the committee to pass on the Swiss allegations.
While the UK closed ranks, across the Atlantic politicians demanded action as the Swiss-originated scandal reverberated around the world.
Senator Elizabeth Warren said US authorities should be tough on repeat offenders like HSBC. In addition to the 2012 money-laundering case, the bank paid $618 million to US and UK authorities in November to settle allegations its traders manipulated foreign exchange benchmarks.
As part of the 2012 deal, HSBC entered into an agreement that shields it from prosecution for certain infractions.
HSBC has said that there are no legal grounds to reopen the deferred prosecution agreement. – Copyright The Financial Times Limited 2015
