The files, analysed by reporters in the International Consortium of Investigative Journalists (ICIJ), showed the British banking giant provided accounts to international criminals, corrupt businessmen, politicians and celebrities.
The files list a range of former and current politicians from Britain, Russia, India and Africa, as well as Saudi, Bahraini, Jordanian and Moroccan royalty, late Australian press magnate Kerry Packer and model Elle Macpherson ::::
“HSBC profited from doing business with arms dealers who channelled mortar bombs to child soldiers in Africa, bagmen for third-world dictators, traffickers in blood diamonds and other international outlaws,” the ICIJ reported.
The files list a range of former and current politicians from Britain, Russia, India and Africa, as well as Saudi, Bahraini, Jordanian and Moroccan royalty, late Australian press magnate Kerry Packer and model Elle Macpherson.
The revelations were likely to stoke calls for a crackdown on sophisticated tax avoidance by the wealthy and by multinational companies.
Notes in the files indicated HSBC workers were aware of clients’ intentions to keep money hidden from national authorities.
Of one Danish account holder collecting cash bundles of kroner, an employee wrote:
“All contacts through one of her three daughters living in London. Account holder living in Denmark, i.e. critical as it is a criminal act having an account abroad non declared.”
In another memo, an HSBC manager discussed how a London-based financier codenamed Painter and his partner could avoid Italian tax:
“The risk for the couple is, of course, that when they return to Italy the UK tax authorities will pass on information on them to the Italian tax authorities. My own view on this was that … there clearly was a risk.”
In response to the reports, HSBC Holdings Plc admitted failings by its Swiss subsidiary.
“We acknowledge and are accountable for past compliance and control failures,” HSBC said in a statement.
It said that its Swiss arm had not been fully integrated into HSBC after its purchase in 1999, allowing “significantly lower” standards of compliance and due diligence to persist.
Businessmen, politicians, sportsmen, models named in files
The investigation was done by the ICIJ, linked to the US-based Centre for Public Integrity, which enlisted more than 140 journalists from 45 countries in cooperation with France’s Le Monde, Britain’s BBC and The Guardian, US program 60 Minutes, German newspaper Suddeutsche Zeitung and more than 45 other media organisations.
Names in the files included people sanctioned by the US, including Turkish businessman Selim Alguadis, and Gennady Timchenko, an associate of Russian president Vladimir Putin targeted by sanctions over Ukraine.
Mr Alguadis told the ICIJ it was prudent to keep savings off-shore, while a spokesman for Mr Timchenko said he was fully compliant with tax matters.
Also named were designer Diane von Furstenberg, who told the ICIJ the accounts were inherited from her parents, and Elle Macpherson, whose lawyers told the ICIJ she was fully in compliance with UK tax law.
Motorcycle champion Valentino Rossi, listed as having $23.9 million in two accounts, said he had regularised his tax situation with Italian authorities.
The files were a version of a set obtained by former HSBC employee-turned-whistleblower Herve Falciani, who copied thousands of bank documents before fleeing from Switzerland to France where they were obtained by tax authorities in 2009.
They were used by the French government to track down tax evaders and shared with other states in 2010, leading to a series of prosecutions for tax evasion.
HSBC Private Bank, the Swiss subsidiary of the British banking group, is under formal investigation in a French probe into tax fraud.
In 2012, HSBC paid a record $1.9 billion fine in a settlement in a money laundering case after a US Senate investigation found it was used to launder hundreds of millions of dollars for Mexican drug cartels.
RELATED! European Study Pours Cold Water on Australian Banks Cost Claims
Elysse Morgan from ABC reports that new research by one of Europe’s biggest banks suggests that Australian banks are hiking interest rates to protect profit margins, not to cover higher funding costs as they have insisted. But the Australian Bankers’ Association has dismissed the study and says lenders may have to raise their rates again.
The study by Societe Generale shows nearly all funding costs for Australian lenders have fallen in the last six months. Societe Generale’s head of strategy in Asia, Christian Carrillo, says the banks’ claims about rising costs are dubious.
“Research suggests that effectively pretty much every source of funding that they use in terms of domestic deposits, short-term funding onshore, long-term funding onshore, has actually gone down,” Mr Carrillo said. ”There has been some widening in spreads between offshore funding rates and the rates that they use to hedge against, but if you take into account the overall rate they pay to fund overseas, even that has actually come down slightly.” Read the full article »»»»
RELATED! SAAB Files For Bankruptcy
Final desperate efforts to organise help from China were obstructed by General Motors over licences.
A statement on the court’s website said three Saab companies had filed for bankruptcy: SAAB Automobile Aktiebolag, Saab Automobile Tools AB and Saab Automobile Powertrain.
Saab’s charismatic chief executive Victor Muller had been due to appear before the court on Monday as judges had been scheduled to decide whether to lift or prolong the three-month bankruptcy protection Saab had been placed under while it was attempting to negotiate a deal to rescue the company.
The car maker was forced to halt production in April as suppliers stopped deliveries over mountains of unpaid bills. Saab’s some 3,700 employees, whose salaries have been delayed for five months running, have yet to receive their November pay cheques :: Read the full article »»»»
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Intangible assets, goods that are easily hidden, lost or sold, present unique risks for financiers. Since the global financial crisis the appetite of bankers for taking unnecessary risk has significantly reduced.
To overcome this, countries wanting to offer movable asset loans are passing legislation to set up “secured transaction” registers, one lender in PNG – Credit Corporation – secures 90 percent of its loans against movable assets and all of those loans have gone to Indigenous entrepreneurs :: Read the full article »»»»
REBLOG! ‘Pickled Russian Potato’ Hacks 100 Million Credit Cards via POS Machines
The virus that was used to steal 40 million people’s credit-card details from giant American retailer Target was, it was recently revealed, called ‘Kaptoxa’ which, as English-language news outlets are helpfully explaining, is Russian slang for “potato.”
The hack is likely to affect more than 110 million credit card users in the US.
And as banks and retailers point fingers – mostly at one-another – speculation over who was behind the Target hack goes on, doubtless it was the work of a very sophisticated crime ring – бушель большевистских картофеля – A Bushel of Bolshoviks!?
The breach was clearly a real black eye for the retailer, the aftermath is however getting much, much darker.
How hackers broke into Target and installed malware on point-of-sale – POS – terminals, then harvested some 40 million card details is still sketchy, what is more more interesting is that almost all-trace of the hack is very quickly being erased, redacted, not by hackers, but by security companies linked to the breach.
At least three security companies so far have scrubbed information related to Target from the internet, highlighting a serious sensitivity to one of the largest ever data breaches :: Read the full article »»»»
image source: indeepmedia/afp