British MPs to probe HSBC over SwissLeaks tax evasion

9th February 2015, Comments 0 comments

British lawmakers announced they would open an inquiry into London-based banking giant HSBC, after allegations the bank helped rich clients dodge taxes emerged from a massive leak of documents.

Cross-party parliamentary group the Public Accounts Committee will investigate the scandal and call HSBC to give evidence, according to the BBC.

"Today's shocking revelations about HSBC further expose a secretive global industry serving a wealthy elite," committee chair Margaret Hodge told the broadcaster.

"The Public Accounts Committee will be launching an urgent inquiry to which we will require HSBC to give evidence - and we will order them if necessary."

HSBC has acknowledged there had been problems in its Swiss private banking subsidiary, but said that it had been overhauled and now has strong controls in place.

The BBC said it had seen 106,000 client accounts in 203 countries, leaked by French whistleblower Herve Falciani, a former HSBC employee who downloaded and leaked the so-called SwissLeaks information cache.

It said the documents include details of almost 7,000 clients based in Britain, and that HSBC had helped its wealthy customers evade hundreds of millions of dollars in tax.

The allegations caused a political firefight in Britain in Monday, with the main Conservative and Labour parties accusing each other of being to blame.

Stephen Green, who was head of HSBC at the time of the alleged wrongdoing, was appointed to the House of Lords by Prime Minister David Cameron's Conservatives in 2010, and served as a trade minister.

Confronted in the street by the BBC, Green refused to answer a reporter's questions and said "As a matter of principle I will not comment on the business of HSBC past or present."

The prime minister was strongly criticised by the opposition Labour party for his decision to appoint Green, but stood by the decision.

"Stephen Green was an excellent trade minister, he did a good job," Cameron said. "I'd also add no government has done more than this one to crack down on tax evasion and aggressive tax avoidance."

- Storm before election -

Breaking three months from a general election, the scandal has also caused problems for the Labour party, which was in power until 2010, including the period when HSBC allegedly facilitated the tax-dodging.

Cameron's government accused Labour of failing to get to grips with tax cheats on its watch.

In turn, the centre-left party summoned a junior Conservative minister to parliament to provide a response to the leaked documents.

Asked if Cameron knew of the allegations when he appointed Green, the premier's official spokesman said there was "no record of any concerns" being flagged to him.

Hodge, the committee chair who is an MP with the Labour party, said of Green "either he didn't know and he was asleep at the wheel, or he did know and he was therefore involved in dodgy tax practices."

The row highlights the complex task both parties face in defining their relationship with big business ahead of the vote, as opinion polls show them to be virtually neck-and-neck.

Cameron's centre-right Conservatives are traditionally seen as more in tune with Britain's largest companies. Labour labelled it "the party of Mayfair hedge funds and Monaco tax avoiders" last week over a tax loophole for hedge funds.

Meanwhile, centre-left Labour's policies -- which include raising the top rate of income tax and a new "mansion tax" for expensive homes -- have drawn criticism from several business leaders who say they could damage the economy.

They contrast leader Ed Miliband's rhetoric with the business-friendly Labour administration under Tony Blair from 1997.

The claims against HSBC arise from files obtained by the International Consortium of Investigative Journalists (ICIJ) -- a network of investigative reporters -- via French newspaper Le Monde.

The ICIJ said the files show "HSBC profited from doing business with arms dealers... bag men for Third World dictators, traffickers in blood diamonds and other international outlaws."

© 2015 AFP

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