HSBC share price: Treasury Committee to investigate tax-dodging scandal

on Feb 13, 2015
Updated: Oct 21, 2019

Top executives of HSBC Holdings Plc (LON:HSBA) and HM Revenue and Customs (HMRC) are expected to appear before UK lawmakers in relation to the tax-dodging scandal engulfing the UK lender’s Swiss private banking unit. The UK’s Treasury Committee plans to summon HSBC chairman Douglas Flint and HMRC chief executive Lin Homer on February 25 to question them over allegations that the Swiss unit helped wealthy individuals evade taxes.

The allegations intensified after media reports last week published details of leaked data about HSBC clients, which had secret accounts with the Swiss branch and allegedly used the unit to dodge taxes. People on this list included royalty, sports and rock stars, Hollywood actors, politicians and arms dealers, said the Washington-based International Consortium of Investigative Journalists (ICIJ), which coordinated the release of the data. Following the release, HSBC admitted failings in compliance and controls at the Swiss bank that might have allowed some clients to evade tax authorities.

“The (Treasury) Committee is concerned about allegations involving HSBC and its Swiss private bank,” said committee chairman Andrew Tyrie, as quoted by Reuters. “Banks have repeatedly told the Committee that, since the crisis, they have put in place reforms to ensure that they operate on the basis of sharply improved standards. The Committee will need reassurance that they have done so in private banking.”

The BBC reported yesterday that the Treasury is preparing legislation to tighten the rules on undeclared income held in offshore accounts. BBC business editor Kamal Ahmed attributed the information to Treasury sources.
The scandal has also attracted the attention of the Bank of England, with Jon Cunliffe, BoE deputy governor for financial stability, signalling that the central bank may look into the case.
“The allegations around HSBC raise serious issues around HSBC’s conduct,” Cunliffe said today in an interview on BBC radio. “This is certainly something that could be of relevance to us.”
In yesterday’s trading, HSBC shares closed 0.7 percent higher at 600.30p as of 09:14 UTC. The company’s stock has fallen 1.3 percent since the start of the year.
According to the Financial Times, as of Feb 09, 2015, the consensus forecast amongst 45 polled investment analysts covering HSBC has it that investors should hold their position in the company. This stance has been maintained since November 26, 2014, when the sentiment of investment analysts deteriorated from “outperform”.
As of 10:07 GMT, Friday, 13 February, HSBC Holdings plc share price is 600.90p.