PARIS: French authorities have ordered global bank HSBC Holdings plc (HSBC) to pay $1.07 billion in bail for a criminal tax-evasion investigation involving its Swiss private bank.
London-based HSBC disclosed the development Thursday, confirming that French magistrates have opened a formal investigation of “alleged tax related offenses” during 2006 and 2007.
The announcement followed the bank’s November disclosure that its HSBC Private Bank unit in Switzerland had been placed under preliminary investigation by French authorities examining whether it had helped wealthy clients duck France’s tax-reporting requirements. HSBC was required to post a bail bond of 50 million Euros then.
HSBC Holdings plc believes the French magistrates’ decision is without legal basis and the bail is unwarranted and excessive,” the bank said Thursday. “It intends to appeal and will defend itself vigorously in any future proceedings.”Shares of HSBC were up 1.48% at $44.42 in Thursday morning trading.
French tax authorities have been examining HSBC since Herve Falciani, a former information technology worker at its private bank in Geneva, stole data from client accounts opened before 2006 and turned it over to investigators.
HSBC said it had moved to strengthen internal controls and tax compliance at the Swiss private banking unit. The bank subsequently said it had shed 70% of the clients at the subsidiary.
