HSBC’s 4 Indian clients under lens for tax evasion

Armed with ‘sufficient evidence’, Indian tax authorities have issued notices to global banking giant HSBC, warning of prosecution against its Swiss and Dubai arms for allegedly abetting tax evasion by four Indians and their families.

HSBC on Monday said that the tax authorities have been probing its arms through summons and requests for information first issued in February 2015, and issued fresh notices later in the year.

The UK-based bank said that it was cooperating with the ongoing investigations in connection with the alleged abetment of tax evasion and money laundering from various countries, including India, United States, France and Argentina.

HSBC added that while announcing its annual results in August and November 2015, its entities had received notices from two offices of the Indian tax authority.

The notices alleged that the tax authorities had ‘sufficient evidence’ to initiate prosecution against HSBC Swiss Private Bank, and its Dubai entity, for abetting tax evasion of four different Indian individuals and/or families. The notices also requested that the HSBC entities show why such prosecution should not be initiated.

The banking major did not name the four individuals. HSBC has been at the centre of attention for the tax authorities in India, and elsewhere, ever since a list containing many Indian and other country-clients of its Geneva branch was leaked.

“With respect to each of these ongoing matters, HSBC is cooperating with the relevant authorities in a manner consistent with relevant laws. There are many factors that may affect the range of outcomes, and the resulting financial impact, of these investigations and reviews, which could be significant”, it said.

Due to the media attention, such issues had evoked, HSBC said it was possible that the other tax administration, regulatory or law enforcement authorities, will also initiate or enlarge similar investigations or regulatory proceedings.

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