HSBC is being investigated over claims of “possible criminal complicity” in the Gupta corruption investigation in South Africa.
Speaking in the House of Lords on Wednesday, two weeks after he first voiced concerns about UK links to the probe, Lord Hain said he had handed new evidence about the alleged involvement of a British bank in the “flagrant robbery” of South Africa to the chancellor.
Hain did not mention the bank’s name in the Lords but named HSBC as the institution in question in a letter to the chancellor.
Hain, a former anti-apartheid activist, had earlier written to Philip Hammond, attaching printouts of bank transfers and asking him to pass them to the Serious Fraud Office (SFO), National Crime Agency (NCA) and Financial Conduct Authority (FCA). A Treasury spokesperson confirmed Hammond had asked the agencies to examine the transactions.
The probe opens up a British link to the snowballing corruption scandal that began when the Indian-born Gupta family were accused of “state capture”, allegedly using their vast wealth to wield influence over South Africa’s president, Jacob Zuma.
Hain told the Lords he had obtained information that “shows illegal transfers of funds from South Africa made by the Gupta family over the last few years from their South African accounts, to accounts held in Dubai and Hong Kong”.
“Many of the transactions are legitimate, but many certainly are not,” he said. “The latter illicit transactions were flagged internally as suspicious. But I am informed that they were told by the UK headquarters to ignore it.
“That is an iniquitous breach of legal banking practice which I trust ministers would never countenance and is an incitement to money laundering, which has self-evidently occurred in this case, and also been sanctioned by a British bank, as part of the flagrant robbery of South African taxpayers of many millions.”
Hain said the transactions were disguised, originating at one bank account before being split in a number of different accounts.
In his letter to Hammond, he said this should result in HSBC being investigated over “possible criminal complicity” in corruption.
Hain told the Lords: “Undoubtedly, hard questions will need to be asked of the facilitating banks, because they have aided and abetted the Gupta money laundering activities.”
The former Labour minister’s latest intervention comes two weeks after the chancellor referred concerns about Standard Chartered and HSBC to the FCA, SFO and NCA. He did so after Hain wrote to him saying high-level sources in South Africa had alerted him to the exposure of British financial institutions to the affair.
Standard Chartered has since said that it closed bank accounts in 2014 due to concerns about potential links to the scandal.
Shadow chancellor John McDonnell has called for an inquiry into the UK’s role in global money laundering after a string of scandals.
In the Lords, Hain called on the chancellor to “ensure that such evident money laundering and illegality is not tolerated and that the bank is investigated for a possible criminal complicity over this matter.
“Urgent action is needed to close down this network of corruption.”
HSBC’s chief executive, Stuart Gulliver, said the bank was “responding to those inquiries that have come in from the FCA and also from South African authorities, and there is nothing more I can really add at this point in time”.
An FCA spokesperson said it was in contact with both banks named and would “consider carefully further responses received”.