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"Do As I Say, Not As I Do" HSBC's 'Reforming' CEO Sheltered Millions In Swiss Bank Accounts

Tyler Durden's picture




 

Oops! Amid new money-laundering allegations against HSBC's Swiss arm, The Guardian reports that leaked files show that CEO Stuart Gulliver sheltered US$7.6 million in a Swiss account through a Panamanian company. While a spokesperson for the bank said that taxes were paid on these funds in Hong Kong, when asked why he used a Panamanian company to hold the funds, given Swiss accounts already offer secrecy, they declined to comment. With Gulliver stating, "the business has been transformed and standards are now up to scratch," we prsume, of course, that the PR spin will be: who better to refocus the 'new' HSBC on battling tax fraud than someone who has been there and done that...

 

As The Guardian reports,

Stuart Gulliver, the HSBC chief executive who has vowed to reform the crisis-hit bank, sheltered millions of pounds in a Swiss account through a Panamanian company and remains tax domiciled in Hong Kong.

 

Leaked files show that the Derby-born Gulliver, in the wake of the international controversy over its Geneva-based private bank, was also one of its clients, holding about £5m in a Swiss account.

 

The bank executive was listed as the beneficial owner of an account in the name of Worcester Equities Inc, an anonymous company registered in Panama, containing a balance in 2007 of $7.6m. It was through this entity that Gulliver’s HSBC bonuses were paid until 2003. He also held a second account in the name of Worcester Foundation, which had been closed before 2007.

In response to queries from the Guardian about his personal account as revealed in the leaked files, a representative for Gulliver said he had made use of HSBC Suisse to hold his bonus payments prior to 2003, when he moved from Hong Kong to London.

Lawyers for Gulliver said that Hong Kong tax had been paid on this income – and explained that he “followed this procedure because he wanted his taxed bonus earnings to remain private from his then colleagues in Hong Kong, which they would not have done if he had kept them in an HSBC Hong Kong account”.

 

The Guardian asked Gulliver why he used a Panamanian company to hold the funds, given Swiss accounts already offer secrecy. His lawyers declined to answer.

 

Gulliver’s legal representatives added that his Swiss accounts have “for a number of years” been voluntarily declared to UK tax authorities. They declined to specify the exact date they were first declared.

The banking details have emerged as the 55-year-old Oxford University graduate, who became chief executive in January 2011, is due to face questions from reporters and investors for the first time since the Guardian and other media outlets published the leaked HSBC files, which revealed misconduct at the bank’s Swiss subsidiary.

The documents, covering 2005-07, detailed how the private bank was complicit in tax evasion and aggressive tax avoidance, doled out bricks of cash in mixed currencies to clients, and provided banking services to criminals, drug smugglers, and friends and families of dictators.

 

Gulliver has already personally signed a “sincere apology” which appeared in three newspapers last Sunday, saying “the standards to which we operate today were not universally in place in our Swiss operations 8 years ago”.

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Mon, 02/23/2015 - 23:06 | 5820977 knukles
knukles's picture

So he gets a big golden handcuffed early retirement package and $375,000,000 restricted options (June 2016 calls @$1/share) and a seat on the board for $275,000/annum plus full pension and medical bennies for life.  Plus an office and 57,000 sq ft mansion in HK (with 17 full time staff) paid for by the bank.  Tough getting caught sheltering the 1%'s moolah

Mon, 02/23/2015 - 23:08 | 5820981 TeamDepends
TeamDepends's picture

Come on brother, the Lilliputians tied him to the ground....

Tue, 02/24/2015 - 01:03 | 5821289 Harlequin001
Harlequin001's picture

I'll wager a pound to a piece of shit that bonus didn't appear on his UK tax return when he became resident there in 2003...

Tue, 02/24/2015 - 02:01 | 5821378 Four chan
Four chan's picture

after a while, its not sellong the cocaine, its WHAT TO DO WITH ALL THE FUCKING MONEY!

Tue, 02/24/2015 - 05:33 | 5821293 philipat
philipat's picture

If he paid tax in Hong Kong, his colleagues would still know how much he was paid by extrapolating his tax return. Hong Kong charges a flat income tax rate of 17% (But only on the time spent proprtionately IN Hong Kong so, in this case, I would imagine he spent at least 50% of the time outside Hong Kong, so he would only have paid 8.5%), which is already quite a nice deal, so why the need for Panama and Switzerland? Unless, of course.....

The Guardian's unanswered questions are also prescient, specifically WHEN did he declare the Swiss accounts to the UK tax authorities and has be paid tax anywhere on the income generated from the Swiss Account(s)? It's a long time since I lived in Hong Kong but my recollection is that, as a tax resident of Hong Kong, he would NOT have been subject to Hong Kong income tax on the proceeds of offshore investments.

Incidentally, if he remains "Tax domiciled in Hong Kong" (For reasons which are obvious in view of the above) I do hope that his secretary, and HMG, are keeping close tabs on how many days per year he spends in the UK, where the top rate of income tax for residents is 45%.

Mon, 02/23/2015 - 23:27 | 5821034 SirBarksAlot
SirBarksAlot's picture

Be reasonable.  He's going to retire to spend more time with his family.

Mon, 02/23/2015 - 23:28 | 5821039 Son of Loki
Son of Loki's picture

"Stuart Gullible could not be reached for comment."

Mon, 02/23/2015 - 23:40 | 5821088 old naughty
old naughty's picture

Gulliver's Tow !

Tue, 02/24/2015 - 00:37 | 5821239 Atomizer
Atomizer's picture

The next installment issue of Gulliver's Travels. TeamDepends nailed it!

Mon, 02/23/2015 - 23:35 | 5821061 one_hundred
one_hundred's picture

my co-worker's ex-wife makes $80 hourly on the computer . She has been out of work for 10 months but last month her paycheck was $12310 just working on the computer for a few hours. look at this now... www.globe-report.com

Tue, 02/24/2015 - 00:31 | 5821229 Atomizer
Atomizer's picture

Stuart Gulliver may be in touch with you.

Mon, 02/23/2015 - 23:09 | 5820983 kowalli
kowalli's picture

You can shot every one of them. ALL banksters like this. They are stealing our money every day and they spend them for shit.

Mon, 02/23/2015 - 23:16 | 5820998 SillySalesmanQu...
SillySalesmanQuestion's picture

"I say hang him.."

Mon, 02/23/2015 - 23:30 | 5821046 Son of Loki
Son of Loki's picture

Give him a fair trial first, then hang him.

Mon, 02/23/2015 - 23:41 | 5821092 kowalli
kowalli's picture

with his family

Mon, 02/23/2015 - 23:21 | 5821011 A Lunatic
A Lunatic's picture

He said he's sorry; and you can take that to the bank.......

Mon, 02/23/2015 - 23:23 | 5821020 SirBarksAlot
SirBarksAlot's picture

Do not try this at home.

If you are not a banker, depositing money in secret bank accounts offshore can lead to high-blood pressure, insomnia and jail time.

Some people who have tried this have had loss of family, mistress and rolls royce.

Please consult your Congressman before moving millions overseas.

Mon, 02/23/2015 - 23:55 | 5821136 EastCoast90
EastCoast90's picture

What if the Congressman demands a consultance fee? Can I cut out the middle man and just move the money to an overseas "Personal trustee" instead?

Mon, 02/23/2015 - 23:26 | 5821031 TeethVillage88s
TeethVillage88s's picture

No mention of the fact that celebrity sports players and Private Executives like Gulliver are "Looting" Corporate Assets, that Assets and corporations may belong to a Country, and that Investors get the shaft when Big Money Executives get Huge Bonues' for Driving the Company in the Ground or passing Debts and Expenses to Tax Payers.

Meh...

Mon, 02/23/2015 - 23:30 | 5821049 kchrisc
kchrisc's picture

 

Fuck the whales.
Save humanity,
guillotine a bankster.

The banksters need to repay us.

 

Tue, 02/24/2015 - 00:21 | 5821175 wisefool
wisefool's picture

Everytime I see stuff like this I imagine the Lebowski vs. Lebowski scene from the movie the Big Lebowski. (modified)

"I look back at my life as long list of achievements. My great wealth acquired entirely by creating tax loop holes, exploiting them, and forcing others to make up for the revenue. What will you see when you look back at your life Sir?"

"I think you just covered it ... man"

Tue, 02/24/2015 - 00:25 | 5821215 DrData02
DrData02's picture

Why is this issue being raised?  Isn't this one of the guys above the law?

Tue, 02/24/2015 - 02:04 | 5821381 Bemused Observer
Bemused Observer's picture

I'm sure he went with the Panamanian outfit because of the free cappuccino maker they give you for opening an account.

Tue, 02/24/2015 - 02:41 | 5821446 Heavy
Heavy's picture

Criminals

Tue, 02/24/2015 - 03:57 | 5821528 Panic Mode
Panic Mode's picture

HSBC only got fined for laundering drug money, and only one guy *scapegoat* is dismissed. Now the CEO involves with a Panama company to shelter tax money. Very smoking hot gun here.

Tue, 02/24/2015 - 04:32 | 5821568 OldFahrtyPants
OldFahrtyPants's picture

I have an account with HSBC UK including a very small Endowment which has run for 20 years 1994 till 2019. What would you ZHers do with it? Keep it till then then close the whole lot down afterwards? Or move it now?

Tue, 02/24/2015 - 07:10 | 5821688 sidney sloth
sidney sloth's picture

It depends on where you reside, your nationality, and what politics you enjoy.

If it is very small and you are shocked (shocked!) at the evil of HSBC, why don't you just donate it to a children's cancer hospital?

Tue, 02/24/2015 - 07:05 | 5821683 sidney sloth
sidney sloth's picture

I've encountered folks using Panamanian companies before. The curious thing about them, compared to other places, is that they do not require a registered office. There is no record of any place where documents pertaining to the company might be found.

Still, in some jurisdictions one can still use bearer shares, so i dont think the guy was being paranoid or even ultra sneaky. He was probably taking the cheapest option, on the day, from various competing corporate regulators in various jurisdictions.

All those who ctiticise this man, which jurisdiction do you believe is the one true government to rule us all with perfect and benign justice?

If the rich can't hide from mother state, nor can you. 

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