Sunday, November 12, 2017 11.16AM /
The Guardian / News
has revealed it closed accounts linked to South Africa’s Gupta family
corruption investigation, admitting for the first time concerns about its
potential ties to the snowballing scandal.
The bank said it had also flagged up its
worries to the financial crime expert who has overseen its money-laundering
controls since it was fined a record US$1.9 billion in 2012 for processing cash
for Mexican drug lords and terrorists.
The scandal began when the Indian-born
Gupta family was accused of allegedly using its vast wealth to wield influence
over South Africa’s president, Jacob Zuma. The Guptas and Zuma deny any
British regulators are already looking
into whether HSBC and Standard Chartered had ties to the Guptas after former
cabinet minister Peter Hain passed a list of transactions to the chancellor
warning of their “possible criminal complicity”.
After previously declining to comment on
its involvement, HSBC admitted on Friday it was forced to close accounts held
by “front companies” associated with the Guptas. “HSBC has been reviewing its
exposure to the Guptas for some time and has closed a number of accounts for
associated front companies wherever we have found them,” it said.
“As we identify or are presented with new
information, we will continue to investigate further and take appropriate
HSBC is understood to have closed the
accounts in 2014, the same year that Standard Chartered said it had shut down
accounts linked to the Guptas. It also notified Michael Cherkasky, who monitors
the bank’s anti-money-laundering controls as a condition of its 2012 settlement
with the US Department of Justice and British Financial Conduct Authority.
The bank issued a statement in response
to evidence contained in the GuptaLeaks, a tranche of files released in South
Africa and reported in The Wall Street Journal. The documents reportedly reveal
HSBC accounts in Dubai were used to channel millions of dollars via companies
linked to contracts to sell Chinese rail locomotives to South Africa.
The Guptas have previously denied any
Fresh details about transactions
involving HSBC could see the bank facing investigation by authorities in the
United States, as they were made in dollars and cleared by its New York office.
Lord Hain raised concerns about British
banks’ links to the Guptas last month. He told the House of Lords earlier this
month he had information that “shows illegal transfers of funds from South
Africa made by the Gupta family over the last few years from their South
African accounts, to accounts held in Dubai and Hong Kong”.
“Many of the transactions are legitimate,
but many certainly are not,” he said.