MPs lash HSBC over Swiss tax evasion allegations as bank bosses say they were oblivious to what was happening

Bosses at HSBC were yesterday accused by MPs of turning a blind eye to alleged tax evasion in its Swiss private banking arm.
In an ill-tempered hearing with the Public Accounts Committee, members said they did not believe that executives in London were oblivious to what was happening.
Chief executive Stuart Gulliver also came under fire for his own secretive finances, and claimed ‘innuendo’ from the media had damaged the bank’s reputation. But he rejected suggestions from committee members that he should resign as chief executive.

Former global private banking boss Chris Meares was described by committee member and Conservative MP Stephen Hammond as a ‘wholly unreliable witness’ after he repeatedly denied any knowledge that tax evasion was taking place under this watch.
MPs accused bosses, including BBC Trust chairman Rona Fairhead, who sat on the bank’s audit committee until 2010 and pocketed more than £500,000 as an HSBC board director last year, as either being aware of wrongdoing or being ‘utterly incompetent’.

He added he has been tax resident in the UK since moving to London from Hong Kong in 2003, and pays ‘millions of pounds of tax to HMRC at the top rate each year’. He admitted the Panamanian company was only liquidated in 2009 or 2010.
But committee chairman Margaret Hodge said: ‘What you are trying to get us to believe – and this stretches the imagination a little – is that there were no other reasons [for setting up the Swiss bank account] other than secrecy.’

Meares, who ran HSBC’s global private banking arm, including the Swiss division, between 2006 and 2011, also came under fire and was asked repeatedly whether he accepted responsibility for alleged widespread tax evasion which occurred partly under his watch between 2005 and 2007.
Meares said he accepts responsibility for the ‘control failings that may have happened’ when he was in charge. But he added: ‘I do not take fairly direct responsibility for individual actions of people in Switzerland that I was unaware of.’

MPs on the committee rejected claims from Meares and Fairhead that they were not aware of tax evasion taking place in the Swiss private banking arm.
Hodge said: ‘Either you were incompetent, completely and utterly incompetent, in your oversight duties, or you knew about it. I don’t believe you did not know.’
Tory David Burrowes added: ‘What we’ve essentially got is blind eye knowledge – holding the telescope to the blind eye so that you, in London, didn’t see what you suspected was going on in Switzerland.’
The head of Argentina’s tax authority yesterday demanded HSBC repatriate £2.3billion in funds that it says it helped clients channel into offshore bank accounts.
Ricardo Echegaray said HSBC’s actions threatened the stability of Argentina’s government and urged the UK giant to denounce tax evasion at its Argentine subsidiary.
Last year Argentina launched a criminal complaint and accused HSBC of helping more than 4,000 clients evade taxes, but HSBC denied the charges.