HSBC bosses say sorry for 'unacceptable' practices after tax dodging allegations

25th February 2015, Comments 0 comments

HSBC bosses on Wednesday apologised for "unacceptable" failings at the banking giant's Swiss division when they were grilled by British MPs over allegations it had helped rich clients dodge taxes.

Chief Executive Stuart Gulliver and Chairman Douglas Flint issued the new apology in an appearance before parliament's influential Treasury Select Committee.

"I'd like to put on the record an apology from both myself and from Douglas for the unacceptable events that took place," Gulliver told the committee.

"It clearly was unacceptable," he said.

HSBC has faced outrage over claims that it helped clients from around the world dodge taxes on accounts containing 180 billion euros ($204 billion) between November 2006 and March 2007 which are being investigated in several countries.

Gulliver added that he was apologising "for lack of controls and the practices which... 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."

The banking chief was also quizzed by lawmakers over revelations this week that he had received his HSBC bonuses through a Swiss bank account that was held by a Panamanian-registered firm and opened in 1998.

"I can understand how people find these arrangements kind of unusual," he told the committee.

Gulliver, who has worked for HSBC for 35 years and became chief executive in 2011, said he was a Hong Kong resident and intended to return there after completing his assignment in Britain.

He added: "There was no tax advantage or purpose whatsoever... it was purely about privacy -- privacy from colleagues in Hong Kong, privacy from colleagues in Switzerland."

Gulliver stressed again that he had paid UK tax on his worldwide earnings for HSBC, company dividends and sales of shares.

Asia-focused banking titan HSBC has seen its reputation tarnished in recent years by a string of high-profile controversies.

- 'Clearly unacceptable' -

HSBC paid out $1.92 billion to US authorities in 2012 for oversight failures which meant Mexican drug traffickers could launder money through its accounts and banned transactions took place from Iran.

Last year, the bank was charged with manipulating a key inter-bank lending rate by the European Commission.

Its foreign currency traders were implicated in a scheme to make money by rigging markets uncovered by the Financial Conduct Authority last year.

HSBC has also faced vast compensation claims in Britain over the mis-selling of both interest rate hedging products and payment protection insurance.

"It's a terrible list," Douglas Flint admitted to lawmakers on Wednesday, when quizzed about the series of scandals at the group.

Questioned about whether there would be any more scandals to come out of the woodwork, he replied: "I sincerely hope that there are no more skeletons to appear."

The parliamentary appearance caps a grim week for HSBC.

On Monday, the lender fended off criticism over Gulliver's Swiss bank account, as it also posted slumping annual net profits.

Earnings after taxation or net profits sank 15 percent to $13.7 billion (12.0 billion euros) last year, blighted by fines and compensation for mis-selling.

© 2015 AFP

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