HSBC under probe over tax fraud in India, other countries

Global banking giant HSBC has disclosed being probed by tax authorities in India, the US, France and Belgium, including against its Swiss and Dubai units, for allegedly abetting tax evasion of four Indians and their families.

Disclosing the "tax-related investigations" in its latest annual report published last week, HSBC further said it has set aside $ 773 million as a provision for various tax- and money laundering-related matters.

HSBC is cooperating with the relevant authorities. The British banking major first came under the scanner in India after a leaked list of hundreds of Indian clients of its Geneva branch found its way to the Indian tax authorities. Similar lists made their way to tax authorities in various other countries, prompting probes.

The Indian government has stepped up its fight against money laundering, allegedly stashed in Switzerland, in recent years and there have been apprehensions that the so-called illicit wealth might have got shifted to other places such as Dubai.

Various tax administrations, regulatory and law enforcement authorities around the world, are conducting investigations and reviews of HSBC Swiss Private Bank and other HSBC companies in connection with allegations of tax evasion or tax fraud, money laundering and unlawful cross border banking solicitation.

The Indian tax authorities have asked the HSBC companies to, “show why such prosecution should not be initiated.” The bank clarified that both HSBC Swiss Private Bank and the HSBC company in Dubai have responded to the show cause notices.

"HSBC has received various requests for information and is cooperating with the SEC's investigation. Based on the facts currently known, it is not practicable at this time for HSBC to predict the resolution of this matter, including the timing or any possible impact on HSBC, which could be significant," it said.