HSBC share price climbs after MPs question bosses
HSBC Holdings Plc (LON:HSBA) shares opened higher today, adding 0.85 percent to 571.30p by 8:30GMT, as investors weighed the repercussions of Monday’s high-profile hearing before MPs. The Public Accounts Committee (PAC) grilled both former and current chiefs at the bank, after last month a whistleblower revealed HSBC’s Swiss unit had helped thousands of wealthy clients avoid taxes.
Chris Meares , former head of private banking at the bank echoed HSBC chair Douglas Flint’s position that the local Swiss management was “most accountable” for the scheme. Admitting his share of responsibility, Meares acknowledged he didn’t know what the Swiss staff were doing.
“Either you’re completely incompetent in your oversight duties or you knew about it,” PAC chair Margaret Hodge rebuked Meares’ position.
Rona Fairhead, ex-risk chief at HSBC was also questioned. She too held Swiss management most responsible for the tax avoidance scheme, saying it was reasonable to rely on existing structures, provided “people look like they’re on top of risks”. However, Hodge called for the resignation of Fairhead as chair of the BBC Trust, a position she took last year.
The leaked data which precipitated the scandal, was enough for UK authorities to begin a formal investigation for conspiracy to defraud the government, Lord Ken Macdonald QC, ex-chief of public prosecutions, said last week.
The scandal unraveled just as HSBC reported “disappointing” figures for 2014. The bank’s annual report revealed profit before tax had slumped 17.2 percent to $18.680 billion, while income dropped 5.2 percent to $61.248 billion.
Meanwhile, Argentina has already begun a criminal investigation into the case, and on Monday demanded HSBC hand over $3.5 billion, which it says the bank helped its Argentine clients avoid paying.
“HSBC built a platform to help clients evade tax,” said Ricardo Echegary, head of Argentina’s tax authority. “Without tax collection, there is no government, there is no public policy, there is no State, that is to say there is no country.”
Argentina is currently facing severe financial difficulties, having defaulted on most of its debt in 2014 as it failed to comply with the repayment structure set in place in 2005, three years after the previous default.
HSBC said it is fully cooperating with Argentine authorities.
As of 09:23 GMT, Tuesday, 10 March, HSBC Holdings plc share price is 572.50p.