HSBC accused of ‘possible criminal complicity’ in South Africa money laundering scandal

HSBC has been accused of “possible criminal complicity” in a money laundering scandal involving South Africa’s wealthy Gupta family.

Speaking in the House of Lords on Wednesday, two weeks after he first voiced concerns about UK links to the probe, Lord Hain said he had handed new evidence about the alleged involvement of a British bank in the “flagrant robbery” of South Africa to the chancellor.

Hain did not mention the bank’s name in the Lords but named HSBC as the institution in question in a letter to the chancellor, where he said the bank should be investigated over “possible criminal complicity” in corruption.

Hain, a former anti-apartheid activist, had earlier written to Philip Hammond, attaching printouts of bank transfers and asking him to pass them to the Serious Fraud Office (SFO), National Crime Agency (NCA) and Financial Conduct Authority (FCA). A Treasury spokesperson confirmed Hammond had asked the agencies to examine the transactions.

The Gupta corruption scandal began when the Indian-born 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 wrongdoing.

Hain told the Lords he had obtained 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. “The latter illicit transactions were flagged internally as suspicious. But I am informed that they were told by the UK headquarters to ignore it.

“That is an iniquitous breach of legal banking practise which I trust ministers would never countenance and is an incitement to money laundering, which has self-evidently occurred in this case, and also been sanctioned by a British bank, as part of the flagrant robbery of South African taxpayers of many millions.”

UK politician urges Hong Kong authorities to probe HSBC, StanChart over ‘illicit funds’ linked to South Africa corruption scandal

Hain said the transactions were disguised, originating at one bank account before being split in a number of different accounts.

Hain told the Lords: “Undoubtedly, hard questions will need to be asked of the facilitating banks, because they have aided and abetted the Gupta money laundering activities.”

The former Labour minister’s latest intervention comes two weeks after the chancellor referred concerns about Standard Chartered and HSBC to the FCA, SFO and NCA. He did so after Hain wrote to him saying high-level sources in South Africa had alerted him to the exposure of British financial institutions to the affair.

Standard Chartered has since said that it closed bank accounts in 2014 due to concerns about potential links to the scandal.

In the Lords, Hain called on the chancellor to “ensure that such evident money laundering and illegality is not tolerated and that the bank is investigated for a possible criminal complicity over this matter.

“Urgent action is needed to close down this network of corruption.”

HSBC’s chief executive, Stuart Gulliver, said on Monday the bank was “responding to those inquiries that have come in from the FCA and also from South African authorities, and there is nothing more I can really add at this point in time”.

An FCA spokesperson said it was in contact with both banks named and would “consider carefully further responses received”.