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South Africa whistleblower aids HSBC money laundering investigation

South Africa whistleblower aids HSBC money laundering investigation

By Iain Withers

A whistleblower is aiding UK financial regulators’ investigation into alleged money laundering in South Africa by British banks including HSBC, it has emerged.

The Financial Conduct Authority (FCA) is probing FTSE 100 lenders HSBC and Standard Chartered’s claimed links to alleged illegal activities by South Africa’s billionaire Gupta family.

Lord Peter Hain, the former Labour minister and anti-apartheid campaigner, passed evidence to the watchdog this autumn that he claims shows the duo and Indian lender Bank of Baroda helped launder money for Gupta-linked companies through Dubai and Hong Kong. 

In the House of Lords yesterday Lord Hain said the FCA was now dealing directly with one of the whistleblowers supplying him with information from South Africa. He also warned the banks against any attempt to “witch-hunt” those involved.

He told peers: “I can report to the House that at least one whistleblower who has been supplying me with information from South Africa has engaged directly with the FCA - it has been a positive experience.

“I say to the financial institutions involved that I named in your Lordships’ House, including HSBC, Standard Chartered and the Bank of Baroda, that if I find that there is any witch-hunting of those responsible…  I will name the institutions involved and identify the individuals as having suffered that persecution.”

The Guptas and their links to president Jacob Zuma are at the heart of a political storm in the country.

Other British firms implicated in the scandal having worked for Gupta-linked companies have included City PR firm Bell Pottinger - which was forced to shut down - and consultant KPMG, which apologised for falling short of its standards and overhauled its South African management team.

HSBC and Standard Chartered declined to comment. Both banks have previously said that they have shut accounts they believe are linked to the Guptas and are committed to combating financial crime.

A HSBC spokesperson has previously said: “HSBC has been reviewing its exposure to the Guptas for some time, and has closed a number of accounts for associated front companies wherever we have found them.

“As we identify or are presented with new information, we will continue to investigate further and take appropriate action.”

Both the Guptas and President Zuma have repeatedly strongly denied wrongdoing and said they are the victims of a “politically motivated witch-hunt”.

The developments come after HSBC had its five-year suspended sentence in the US for money laundering for Mexican drug cartels ended.

Separately the UK Government this week unveiled plans to create a new national economic crime centre to clamp down on financial crime including money laundering.

In his speech, Lord Hain called on UK firms in general to front up to the “disease” of money laundering wherever evidence of the practice was found, rather than to “deny in the first instance”.

www.telegraph.co.uk/business/2...

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