HSBC share price: French prosecutor demands trial over tax avoidance scandal
HSBC Holdings plc’s (LON:HSBA) shares were down 0.23 percent to 559.00p as of 13:13 GMT yesterday, after earlier on Friday the French financial prosecutor’s office announced it had formally requested that the lender’s Swiss private banking unit be put on trial for helping French citizens to aggressively avoid taxes.
HSBC now has one month to respond, after which the court will decide whether or not to hold a trial.
“This is a normal step in the judicial procedure and the outcome of the matter is not determined as of today,” the bank said.
Earlier this year it became clear that more than 3,000 French clients of the private bank, among many more, were involved in the scandal. Some of the French citizens have already been brought to court for defrauding tax authorities.
It was reported that HSBC refused a deal with the French prosecution, which would have seen the bank pay a €1.4bn fine to avoid a trial.
HSBC faces inquiries in a number of countries in relation to the tax avoidance scandal at the Swiss private banking unit. Argentina has already officially demanded $3.5 billion in cash payments from the London-based lender, which it says helped its Argentine clients avoid paying, and the US is considering fining the lender.
Meanwhile, a former UK prosecution chief said last week, that there was sufficient evidence for UK law enforcement agencies to formally open an investigation.
Former and current HSBC employees have already had to answer questions in relation to the scandal on UK soil, during two sessions in Parliament in front of the Public Accounts Committee (PAC). The hearings prompted a political reaction, as well as calls for the resignation of HSBC chairman Douglas Flint.
As of 14:39 GMT, Friday, 13 March, HSBC Holdings plc share price is 560.90p.
Since listing in November last year HSBC share price has declined in value by 12%, as the scandal involving alleged tax evasion in Switzerland has severely impacted investor sentiment. Ten days after revelations about HSBC’s Swiss subsidiary first broke, the bank is now facing 10 separate inquiries around the world.
