UpdateHSBC ordered to pay bail of 1 billion euros in French criminal tax probe

Banking giant HSBC said it will contest a French criminal investigation related to alleged tax offences of its  Swiss private banking unit after authorities in Paris revealed they have broadened their investigations from the private banking unit to include the global company HSBC Holdings.

HSBC was told to pay a 1 billion euro bail (HK$8.3 billion) because of the French criminal investigation.

“On 8 April 2015, HSBC Holdings was informed that it has been placed under formal criminal investigation by the French magistrates in connection with the conduct of HSBC’s Swiss Private Bank in 2006 and 2007 for alleged tax-related offenses. A 1 billion Euro bail was imposed,” HSBC disclosed in a filing to the Hong Kong Stock Exchange on Friday.

“HSBC believes the French magistrates’ decision is without legal basis and the bail is unwarranted and excessive. It intends to appeal and will defend itself vigorously in any future proceedings,” HSBC said.

Earlier this year, senior HSBC executives including its chief executive officer Stuart Gulliver and chairman Douglas Flint were grilled in British Parliament, following allegations by the International Consortium of Investigative Journalists (ICIJ) that HSBC’s Swiss banking unit assisted wealthy clients in evading taxes. 

HSBC on Wednesday was informed it was placed under formal criminal investigation regarding its private bank’s conduct in 2006 and 2007. The move came five months after HSBC’s Swiss unit was charged and ordered to post a 50-million-euro bail.