9th Apr 2015 13:08
LONDON (Alliance News) - HSBC Holdings PLC Thursday said that it has been placed under formal criminal investigation by the French magistrates due to the conduct of its Swiss private bank in 2006 and 2007 over allegations that the unit helped wealthy clients to evade tax.
According to HSBC, a EUR1 billion bail was imposed. The move is significant as the French magistrates had previously been focused on the Swiss private banking unit as opposed to the holding company. HSBC's Swiss private bank, a separate legal entity within the group, was already under formal criminal examination by French magistrates.
In its annual report for 2014, the bank said it was informed in February this year that the French magistrates are of the view they have completed their investigation into HSBC Swiss Private Bank and that the matter has been referred to the public prosecutor for a recommendation on any changes to be brought, whilst reserving the right to continue investigating other conduct at HSBC.
"HSBC Holdings PLC believes the French magistrates' decision is without legal basis and the bail is unwarranted and excessive. It intends to appeal and will defend itself vigorously in any future proceedings," HSBC said in a statement.
In its annual report, HSBC said that there had been "unacceptable" practices within the Swiss private bank, but that it has since taken action to overhaul the business. The bank has said that the unit is now about one-third of the size it was in 2007 by customer numbers and countries served.
The allegations over HSBC's Swiss private bank were brought into focus in early February when a number of media outlets, including the Guardian, Le Monde and the Washington-based International Consortium of Investigative Journalists published reports on a leak of files containing details of bank accounts.
HSBC shares were up 2.3% at 600.40 pence on Thursday afternoon, one of the best performers in the FTSE 100.
By Samuel Agini; [email protected]; @samuelagini
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