How World Sees South Africa: HSBC ‘Ignored’ Warnings Over Illicit Gupta Transfers

 

JOHANNESBURG — Pressure will be mounting on UK headquartered bank HSBC to act swiftly on alleged transgressions regarding Gupta money laundering. Renowned anti-Apartheid activist, Lord Peter Hain, on Wednesday announced in the UK’s House of Lords that he had handed over evidence to authorities regarding the Guptas’ illicit outflows. Hain, in his speech, said that the “illegal transfers of funds, from South Africa, [were] made by the Gupta family over the last few years from their South African accounts to accounts held in Dubai and Hong Kong”. It’s understood that UK headquartered HSBC and Standard Chartered are under the spotlight regarding these transactions. The FT reported on Wednesday that Andy Halford, Standard Chartered’s finance director, said his bank had informed regulators about issues connected to the Guptas in 2013 already and closed their accounts. Meanwhile, HSBC has not commented yet as it faces down its latest scandal. The bank is still reeling after a US federal court jury last month found that former HSBC currency trader, Mark Johnson, was guilty of conspiracy and wire fraud after executing trades that drove up costs for a client. Stuart Scott, a former HSBC trader who lives in the UK, was also charged but he is fighting extradition to the US. The Gupta saga will prove to be another curveball for HSBC, as reports about Hain’s revelations have made it into the likes of the FT, Bloomberg and The Guardian. – Gareth van Zyl

UK urged to probe HSBC, StanChart over Gupta links, FT reports

The UK has asked financial enforcement agencies to probe possible ties between HSBC Holdings Plc and Standard Chartered Plc to South Africa’s Gupta family, the Financial Times reported.

The Guptas and HSBC on the front page of London’s Financial Times.

Chancellor of the Exchequer Philip Hammond said that he had passed on concerns from Peter Hain, a former Labour cabinet minister, that the London-based banks might have handled illicit funds linked to the family via Hong Kong and Dubai, the FT said.

The Guptas are at the heart of a political scandal in South Africa over allegations that they used a friendship with President Jacob Zuma to influence state business. Zuma and the Guptas have denied any wrongdoing.

Guptas go global: This is the controversial family’s latest appearance in the world’s premier business publications.

Hain did not accuse HSBC or Standard Chartered of wrongdoing but, in a letter to Hammond, said that they should review transactions due to evidence, including material from whistle-blowers, that hundreds of millions of South African rand were laundered out of the country, according to the FT.

In reply, Hammond said that he had contacted the Financial Conduct Authority, Serious Fraud Office and National Crime Agency in the U.K., the paper said.

According to the FT, the FCA said it was “already in contact with both banks named and will consider carefully further responses received.”

Spokesmen for HSBC and Standard Chartered declined to comment.

The Guptas have also found themselves being mentioned by the likes of the UK’s Guardian, just one of many publications running stories about the latest HSBC scandal.

HSBC said to be focus of criminal probe sought by UK lawmaker

HSBC Holdings Plc is the unnamed bank that is the focus of a senior British lawmaker’s demand for a criminal probe into a relationship with South Africa’s Gupta family, according to two people with knowledge of the allegations.

Peter Hain, a Labour Party member of the House of Lords, asked the authorities to investigate a U.K. bank for “possible criminal complicity,” after it allegedly failed to take action on internal concerns about suspicious transactions related to the Guptas. Hain didn’t name HSBC in his speech in Parliament. The people who identified the bank asked not to be identified discussing a sensitive legal matter.

HSBC must immediately freeze all Gupta-linked bank accounts in all jurisdictions until the origin of the money has been established. https://twitter.com/garethvanzyl/status/925788675341942785 
 U.K. regulators last month said they are looking into whether HSBC and Standard Chartered Plc facilitated money-laundering as a result of possible ties to the Gupta family after Hain warned illicit funds may have passed through the United Arab Emirates and Hong Kong, where the banks have had large footprints. Hain said Thursday that he now has evidence of wrongdoing, and gave printouts of the transactions to the Chancellor a day earlier.

“Undoubtedly hard questions will need to be asked of the facilitating banks, because they have aided and abetted the Gupta money laundering activities,” Hain told parliament. “Can the Chancellor please ensure that such evident money laundering and illegality is not tolerated and that the bank is investigated for a possible criminal complicity over this matter? Urgent action is needed to close down this network of corruption.”

An HSBC spokeswoman declined to comment and referred to comments Chief Executive Officer Stuart Gullivermade on Monday.

HSBC
“On the enquiries as a result of Lord Hain’s letter to the Chancellor, obviously we are responding to those enquiries that have come in from the FCA and also from South African authorities, and there is nothing more I can really add at this point in time,” Gulliver said on a call with reporters.

On Sept. 25, Hain requested that the Financial Conduct Authority, the Serious Fraud Office and the National Crime Agency look into whether British banks facilitated alleged money-laundering by the Gupta family. The scandal surrounding the Indian-born Gupta brothers, their business connections with the family of President Jacob Zuma and their alleged ability to direct state tenders have rocked South Africa’s government.

Zuma and the Guptas have consistently denied any wrongdoing. Spokesmen for Zuma and the Gupta family didn’t immediately respond to phone calls and an email requesting comment.

The U.K. treasury said it passed the letter to the FCA.

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