Guptas: HSBC London 'ignored warnings of money laundering'
CAPE TOWN - Lord Peter Hain, a British Parliamentarian said on Friday that South African HSBC staff members had tried to warn their UK counterparts about the illegal transactions between the South China Rail and Transnet locomotive deal, but were essentially ignored.
According to the Daily Maverick, Hain said in a letter to the UK’s Financial Conduct Authority (FCA) that HSBC may have been guilty of not acting on warnings of possible theft and money laundering activity.
In early November Hain told the UK House of Lords that there was a criminal network between banks in the United Arab Emirates and Hong Kong and a number of Gupta-linked companies.
Hain said that over R750 million of illicit funds may have been moved by HSBC. Hain told a television interview that he was asked by high-ranking ANC members to flag suspected criminal activity with the bank.
"We've started to uncover bits of it with HSBC making this admission, it's good that they have made it, they need to do more and the other banks need to as well," he said.
In the letter to the FCA, Hain states the following:
“The transaction records which I had delivered to the Treasury and I assume now in your possession include the 21% kickbacks from South China Rail transferred to Gupta Brother HSBC accounts in Hong Kong, amounting to about R5bn over two years.”
“These relate to the now infamous Transnet locomotive deal. The records show how the Guptas would then split the money into multiple accounts in a typical money laundering fashion through multiple transfers. Also, money was transferred to HSBC accounts in Dubai.”
The Gupta brothers have denied these allegations.
Hain further writes that “An important part of this is that HSBC SA staff had visibility of the Hong Kong accounts and warned London this was theft and money laundering. However London HSBC ignored that warning, presumably deliberately, and so no action was taken to prevent this illegal banking activity.”
HSBC has subsequently closed all accounts related to the Gupta brothers.
On November 13, HSBC said that it would be reviewing its "exposure" to the Gupta's and according to reports, has since closed a number of accounts for associated front companies linked to the family.
The decision follows a Wall Street Journal report which detailed how the family used HSBC bank accounts in Dubai to transfer money through firms linked to suspected kickbacks.
-BUSINESS REPORT ONLINE