Advertisement
Advertisement
HSBC
Get more with myNEWS
A personalised news feed of stories that matter to you
Learn more
Stuart Gulliver, HSBC Group chief executive officer, was listed as the beneficial owner of the account containing at least US$7.6 million in 2007, a British newspaper reported. Photo: Bloomberg

Update | HSBC chief with Hong Kong residency ‘kept US$7.6 million in Swiss bank account’

HSBC shares retreated slightly in the opening hours of trading on Monday after media reports that chief executive Stuart Gulliver, tax-domiciled in Hong Kong, sheltered US$7.6 million in a Swiss account through a Panamanian company.

HSBC

HSBC shares retreated slightly in the opening hours of trading on Monday after media reports that chief executive Stuart Gulliver, tax-domiciled in Hong Kong, sheltered US$7.6 million (HK$58,948,716) in a Swiss account through a Panamanian company.

As of 10.10am, the Hong Kong-traded HSBC stocks were down 0.4 per cent to HK$71.65.

Revelations on Gulliver come on the heels of the new money-laundering allegations against HSBC’s Swiss arm that are set to cast a shadow on the bank’s annual results announcement later on Monday.

Gulliver has admitted failings in HSBC’s Swiss arm in the period up to 2007 and apologised to investors and customers, but said the business has been transformed and standards are now up to scratch.

The HSBC chief has UK non-domiciled tax status, allowing the 55-year-old executive to keep offshore income and capital gains out of the British tax net, The Guardian reported.

The Guardian report, citing leaked files, said Gulliver was listed as the beneficial owner of an account in HSBC’s Swiss bank in the name of Worcester Equities, an anonymous company registered in Panama, containing a balance in 2007 of US$7.6 million. It was through this entity that Gulliver’s HSBC bonuses were paid until 2003, and he also held a second account in the name of Worcester Foundation, which had been closed before 2007, The Guardian said.

Lawyers for Gulliver said that Hong Kong tax had been paid on this income – and said he "followed this procedure because he wanted his taxed bonus earnings to remain private from his then colleagues in Hong Kong, which they would not have done if he had kept them in an HSBC Hong Kong account".

The Guardian asked Gulliver why he used a Panamanian company to hold the funds, given Swiss accounts already offer secrecy. His lawyers declined to answer.

Responding to the Guardian report, HSBC said Gulliver holds a bank account in Switzerland that was set up in 1998 to hold bonus payments.

A spokeswoman for the bank gave details of the account and of other issues related to Gulliver’s tax status. She said Gulliver set up the account when he was living and working in Hong Kong to hold bonus payments. Full tax was paid in Hong Kong on the bonus payments and Gulliver voluntarily declared his Swiss account to UK tax authorities for a number of years, the spokeswoman said.

She said the account was set up in 1998 in the name of a Panamanian company for reasons of confidentiality “and this had no other purpose and provided no tax or other advantage”. She did not say how much the account contained.

There was no suggestion in the Guardian report that Gulliver broke any rules.

He moved to Hong Kong in 1980 and became a permanent resident with right of abode, along with his wife who is an Australian national, the HSBC spokeswoman said.

"Hong Kong is Mr Gulliver’s home and as a matter of law he is domiciled in Hong Kong. It should not be a surprise that Mr Gulliver, who has spent the majority of his nearly 35-year career at HSBC in Hong Kong, has made his home there.

"Since being posted to the UK from Hong Kong in 2003, Gulliver has paid full UK tax on the entirety of his worldwide earnings, less a credit for tax paid additionally in Hong Kong (where he is also tax resident) on that part of the same earnings doubly taxed," she said.

Additional reporting by Reuters

Post