HSBC saw its shares tumble for a second consecutive day as a range of regulators around the world jumped on the bandwagon and decided to examine the bank for helping thousands of wealthy investors avoid tax with Swiss bank accounts.
HSBC stock was down over 2% after an hour of trading as various government watchdogs said they would individually consider examining 100,000 of HSBC’s clients’ accounts in a bid to root about mass tax avoidance.
The bank is alleged to have repeatedly helped its richest clients hide and dodge taxes in their home countries. The allegations stem from the largest financial data leak of its kind in history.
Around 140 journalists from 45 different countries helped unearth the secret accounts in Switzerland after Herve Falciani, an HSBC whistleblower turned employee, leaked it to French authorities.
Britain’s Public Accounts Committee (PAC) confirmed that it would investigate the scandal and would rope in Stephen Green the former HSBC CEO from 2003, to give evidence. “PAC will be launching an urgent inquiry to which we will require HSBC to give evidence – and we will order them if necessary,” said the committee’s chairman Margaret Hodge.
“Either he didn’t know and he was asleep at the wheel, or he did know and he was therefore involved in dodgy tax practises. Either way he was the man in charge and I think he has got really important questions to answer.”
In tandem, John Mann, a Treasury Select Committee member, has written to the committee’s leader, Andrew Tyrie, to call in Green to give evidence and “put the record straight”.
“As a matter of principle I will not comment on the business of HSBC past or present,” Green told BBC’s Panorama.
Meanwhile regulators in Belgium, France, Argentina, the US and Switzerland have also voiced “calls to action”.
Belgium is mulling over whether to issue arrest warrants for directors for the Swiss division of the bank. France said it would like to see a coordinated European effort when it launches its investigation into the lender.
Meanwhile, HSBC could see its 2012 deferred prosecution deal with US authorities over anti-money laundering lapses reopened.