German authorities investigate HSBC over tax evasion

It has been revealed that German authorities have opened an investigation into whether HSBC's Swiss unit helped clients to evade tax. Lawyers for HSBC are now negotiating with German authorities over a settlement.

German authorities have opened an investigation into whether HSBC Holdings Plc’s (LON:HSBA) Swiss private bank helped clients to evade tax, according to a report by Swiss weekly SonntagsZeitung.



Citing unnamed sources close to the bank, the newspaper reported yesterday that authorities in the German state of North Rhine-Westphalia contacted at least eight HSBC employees in Zurich in recent weeks. Lawyers for HSBC are negotiating with authorities for a settlement which should also include a solution for the employees, the newspaper added.

A spokesman for HSBC in Geneva declined to comment on the report.

A joint investigation by several media outlets last year led to the publication of leaked documents alleging that HSBC’s Swiss unit had helped wealthy clients evade taxes and hide assets worth millions of dollars from the authorities between 2005 and 2007. The revelation forced HSBC to issue a public apology for the unit’s practices and sparked probes in several countries, including France and Belgium. In the UK, HSBC chief executive officer Gulliver and HSBC chairman Douglas Flint appeared before Members of Parliament for questioning over the scandal. Gulliver has admitted that “the practices of the private bank back in the past are a source of shame and reputational damage” to the UK lender but both he and Flint have emphasised on how the bank had been “completely overhauled” in recent years.

In today’s trading, HSBC shares were down 2.9 percent at 520.46p, as of 10:18 GMT. The company’s market capitalisation currently stands at £103.5 billion.

As of Jan 02, 2016, the consensus forecast amongst 27 polled investment analysts covering HSBC had it that the company will outperform the market. The same consensus estimate has been maintained since September 09, 2015, when the sentiment of investment analysts improved from “hold”.

As of 10:31 GMT, Monday, 04 January, HSBC Holdings plc share price is 521.15p.

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