HSBC, StanChart face UK probe over Gupta ties

By BLOOMBERG

LONDON • UK regulators are looking into whether HSBC Holdings plc and Standard Chartered plc (StanChart) facilitated money-laundering as a result of possible ties to South Africa’s politically powerful Gupta family.

The Financial Conduct Authority probe comes after Peter Hain, a member of the unelected House of Lords, wrote a letter raising concerns about the banks’ possible exposure to the Guptas.

In the letter, Hain said allegedly illicit funds may have passed through the United Arab Emirates and Hong Kong, where HSBC and StanChart had large footprints.

“It will be no secret to financial crime experts that criminals target large and credible financial institutions for the same reasons that legitimate multi-national networks do for their global reach,” Hain said in the Sept 25 letter to UK Chancellor Philip Hammond.

“I have deep concerns and questions around the complicity, whether witting or unwitting, of UK global financial institutions in the Gupta/President Jacob Zuma criminal network.”

Hain asked the authorities to investigate Zuma, 10 of his family members, 11 Gupta family members and five other associates, as well as 14 entities linked to them.

In a question to the House of Lords yesterday, Hain also requested the authorities look into India’s Bank of Baroda, which is the last bank to hold bank accounts for Gupta companies.

StanChart said while it wasn’t able to comment on specific client transactions, it could “confirm that after an internal investigation, accounts were closed by us by early 2014”.

“StanChart takes its responsibility to combatfinancial crime very seriously and is fully commit- ted to doing business in accordance with local and international regulatory and legal requirements,” the London-based bank said in a statement.