Swiss authorities have closed an investigation into allegations that HSBC's Geneva branch helped clients for money laundering after the bank paid $43 million for organisational weakness.
Indian officials are reviewing the development, but denied any major impact on domestic legal proceedings.
"We ended the procedure following a deal with the bank, which will pay 40 millionSwiss francs ($43 million, 38 million euros)," Olivier Jornot, attorney general in the Swiss canton of Geneva, told reporters.HSBC's Swiss private bank is being accused for suspected to have secret accounts of wealthy customers who had evaded tax in India and elsewhere. Indian tax officials have finalised the tax assessment of 628 HSBC cases. As per Indian tax authorities, more than Rs 6,000 crore is allegedly stashed in HSBC.
Six Indians figure among scores of foreign nationals with Swiss bank accounts, whose names have been made public by Swiss authority in its official gazette for being probed in their respective countries.
Legal experts said Swiss laws are weak, which is why the Swiss prosecutor has not been able to press any criminal charges. HSBC has not accepted any wrongdoing in this case.
Four month ago, Swiss authorities had raided various locations of HSBC private bank offices in Geneva and started a major investigation on money laundering charges and suspected tax-dodging scheme which allegedly helped rich customers launder money.
In a statement, the Geneva prosecutor's office said the bank had "rapidly agreed to begin paying an amount aimed at repairing the illegal acts committed in the past."
Geneva authorities opened the probe in February as the so-called Swissleaks scandal exploded following the publication of secret documents claiming the bank assisted many wealthy clients in thwarting the taxman.
The agreed 40-million-franc compensation would mark the largest amount ever paid in Geneva, Jornot said.
The agreed 40-million-franc compensation would mark the largest amount ever paid in Geneva, Jornot said.
Geneva lead prosecutor Yves Bertossa meanwhile explained that "it is difficult to prove acts of money laundering. That is why we preferred to go with a negotiated solution."
HSBC hailed the agreement, saying "the investigation found that neither the bank nor its employees are suspected of any current criminal offences."
"The bank has fully cooperated with the investigation throughout and will not face criminal charges," it said in a statement.
The bank insisted that it had in recent years "undergone a radical transformation," and had "implemented numerous initiatives designed to prevent its banking services being used to evade taxes or launder money."
Bertossa said no current employees at the HSBC Geneva offices would face prosecution, but did not rule out future probes of former employees.
The Swissleaks affair erupted in February following investigations by international newspapers -- led by Le Monde of France -- using stolen documents supplied by former HSBC IT employee Herve Falciani.
That data indicated the bank helped over 120,000 clients to hide 180.6 billion euros from tax authorities.
Those revelations came among growing evidence that pledges by banks to halt illicit or irresponsible activities that led up to the 2008 financial crisis have not been fulfilled.
In February the British bank acknowledged that "we sometimes failed to live up to the standards the societies we serve rightly expected from us."
Source - DNA
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