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 (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".