Panama Papers: HSBC helped rich clients register more than 2,300 shell companies, leak report says
The “Panama Papers” trove of leaked documents cast HSBC Holdings in a harsh light, with the consortium of investigative journalists behind the documents reporting it found the bank was among the most active in registering shell companies that move money around the world on behalf of rich and politically connected clients.
HSBC and its affiliates accounted for more than 2,300 of the 15,600 shell companies that Mossack Fonseca, a Panama law firm, helped form for clients of hundreds of international banks, according to findings released by the International Consortium of Investigative Journalists.
Journalists working with the consortium pored through millions of pages of documents leaked from the firm to piece together what they alleged was a global web of shell companies that helped hide wealth of world leaders and criminals, among others. The records outlined the creation of more than 200,000 offshore companies in all, the group said.
While companies that shield owners’ identities can be used legally, they can also be tools for hiding assets, laundering funds or evading taxes. The US, among other countries, require banks doing business in the country to perform certain levels of due diligence on their clients to understand who the beneficial owners of such structures may be.
More than 500 banks in all requested that Mossack Fonseca and a predecessor firm create shell companies for their clients from 1977 through the end of 2015, according to the ICIJ. They included Credit Suisse Group AG, UBS Group AG, Experta Corporate & Trust Services SA and Coutts & Co. Trustees, according to a summary compiled by the group.