Roundup: HSBC bosses apology for "unacceptable" tax evasion practice

HSBC Holdings plc's two top bosses Wednesday apologized for its Swiss unit's "unacceptable" practice on dodging tax for its clients.

Stuart Gulliver, group chief executive of HSBC, and Douglas Flint, chairman of HSBC, were answering questions from British Members of Parliament (MPs) of the House of Commons Treasury Committee Wednesday afternoon.

SHARE RESPONSIBILITY

Earlier this month, the Britain-based bank was reported its Swiss private bank helped clients to avoid tax. The two executives have already delivered their apologies on the misconducts via advertised page of British newspapers and its yearly financial statement report.

Gulliver said in front of the committee that the practices had caused "damage to trust and confidence" in the group.

Gulliver said: "I'd like to put on the record an apology for the unacceptable events that took place at our private bank in Switzerland in the mid-2000s, which is clearly an apology we'd like to make to you all, to our customers, shareholders, to the public at large."

He stressed:" It clearly was unacceptable and it has clearly damaged HSBC's reputation."

Gulliver has worked for HSBC for 35 years. He was appointed as group chief executive in 2011.

Flint, who was finance director of HSBC when the case occurred, said he felt shame and would take his "share of responsibility" for Swiss unit failings.

Flint added that the process of reforming or restructuring the bank will "always be ongoing", and now it is "more than half way".

Besides the tax evasion scandal, over the past few years, the leading bank in Europe has been involved in a range of banking misconducts, including foreign exchange manipulation, rigging of international interest rate benchmarks, money laundering, etc.

EXECUTIVE'S PRIVACY

HSBC chief executive's personal account arrangement has also been in the public spotlight recently.

Earlier this week, Gulliver was also reported as the beneficial owner of an account of HSBC Suisse in the name of Worcester Equities Inc., a company registered in Panama.

His bonuses were paid through that entity until 2003, and the balance of the account was 7.6 million U.S. dollars in 2007, said the Guardian.

Gulliver Wednesday defended that such arrangement only reflected a desire for privacy from his colleagues at HSBC in Hong Kong.

He said:" It was purely about privacy from colleagues in Hong Kong and Switzerland. We had a computer system back in the day that allowed everybody to inquire into staff accounts."

He explained: "I was amongst the highest paid people and I wished to preserve my privacy from colleagues. Nothing more than that."

"The important point is I've paid UK tax on my HSBC earnings during that entire period (since being based in Britain), so the amount of tax I have paid is the fair and appropriate amount," he added. Endit