HSBC apologise over ‘unacceptable’ tax dealings

Avaaz organised a demonstration against tax evasion outside the House of Commons yesterday. Picture: PA
Avaaz organised a demonstration against tax evasion outside the House of Commons yesterday. Picture: PA
Share this article
Have your say

HSBC chief executive Stuart Gulliver and chairman Douglas Flint have apologised to MPs for “unacceptable” activities at the bank’s Swiss subsidiary, where clients were advised on tax avoidance schemes. They said this had done “horrible reputational damage” to the bank.

Mr Flint told the House of Commons Treasury select committee yesterday that he felt “very ashamed” over failings exposed by the 2009 leak of ­account data by a whistle-blower – but he insisted those most accountable were the local ­management team at HSBC ­Suisse in the mid-2000s and the lower-ranking “relationship managers” who had direct dealings with clients.

He rejected a suggestion that he and Mr Gulliver should lose their jobs, and made clear he would not give up past bonuses in response to the scandal, saying that staff in Switzerland had “let down” the bank.

Meanwhile, HM Revenue & Customs chief executive Lin Homer announced that French authorities have formally agreed the leaked information can be shared with other law enforcement agencies and regulators for the purpose of pursuing criminal offences.

HMRC will meet the Serious Fraud Office, Financial Conduct Authority, Crown Prosecution Service, City of London Police, National Crime Agency and ­the EuroJust agency next week to discuss how the data can be shared for investigations.

Mr Gulliver defended his decision to be paid via a Panamanian company and an account in the Swiss private bank, insisting that the arrangement was not designed to avoid tax but to protect his privacy.

He acknowledged that the arrangements looked “unfamiliar and rather strange” to outsiders, but said: “There was no tax advantage or purpose whatsoever.”

Mr Gulliver – who has worked for HSBC for 35 years and became chief executive in 2011 – told the committee: “I would like to put on the record an apology from both myself and Douglas for the unacceptable events that took place at our private bank in Switzerland in the mid-2000s.

“It is an apology we would like to make to you, our customers, our shareholders and the public at large.

“It clearly was unacceptable. We very much regret this, and it has damaged HSBC’s reputation.”

Asked precisely what he was apologising for, Mr Gulliver said: “The lack of controls, and practices which now, judged with the benefit of hindsight, we would not be at all comfortable with if they were happening today, and which have clearly resulted in damage to trust and confidence in HSBC.”

Committee chairman Andrew Tyrie MP read out a long list of “regulatory problems” HSBC was currently facing, including PPI mis-selling, interest rate derivative mis-selling, forex manipulation and violation of international sanctions.

Mr Flint said: “It is a terrible list … One of the most humbling things that has happened in my career is a recognition of all the things you did not know, and you go and say, ‘What could I have known or what should I have known?’”

Mr Gulliver was challenged by Labour MP Mike Kane over whether he had “the moral authority” to push through reforms to clean up HSBC.

The banker said: “I believe the changes I have made to the firm clearly demonstrate the sincerity of my desire to change HSBC.”

Asked if he would consider himself “a fat cat”, Mr Gulliver told Mr Kane: “You would have to define ‘fat cat’ for me to be able to comment more meaningfully on that.”

Mr Flint said that direct ­responsibility for events at HSBC Suisse rested with local management in the country and the “relationship managers”, only 
30 per cent of whom were still with the group.


Twitter | Facebook | Google+

Subscribe to our DAILY NEWSLETTER (requires registration)


iPhone | iPad | Android | Kindle