HSBC Says CEO Paid Tax After Setting Up Swiss Account, Keeping HK Residence - Report

Tom Burroughes Group Editor London 23 February 2015


On the eve of reporting its full-year 2014 and quarterly results, HSBC explained that its CEO paid tax after setting up his own Swiss account and retaining his legal residence in Hong Kong.

HSBC, which is due to issue full-year and quarterly results for 2014 today, has said that its chief executive, Stuart Gulliver, paid tax after setting up his own Swiss account and retaining his legal residence in Hong Kong, Bloomberg reported.

The bank responded to an article in the Guardian newspaper yesterday and told the news service that Gulliver opened the account in 1998 to hold bonus payments while working in Hong Kong. He paid Hong Kong taxes on the bonuses there, and since moving to the UK in 2003 has paid UK taxes on his earnings globally, it said.

“Mr Gulliver voluntarily declared his Swiss account to UK tax authorities for a number of years,” HSBC is quoted as having said.

The last few weeks have seen the Hong Kong/London-listed banking group hit by a media and political storm. A report by the Washington DC-based International Consortium of Investigative Journalists and a separate documentary by the BBC Panorama programme described how the bank allegedly helped tax evaders via its Swiss private bank. As far back as 2006-07, a large cache of data was stolen from the bank. A former employee, Hervé Falciani, is on trial in Switzerland for the theft, which is in breach of Swiss bank secrecy rules. Prosecutors claim Falciani’s assertion of being a whistleblower are bogus.

The Guardian said Gulliver was listed as the beneficial owner of an account at HSBC Suisse in the name of Worcester Equities Inc, a company registered in Panama. His bonuses were paid through that entity until 2003, and the account had a balance of $7.6 million in 2007, the newspaper said. While the publication detailed the account and his continuing use of Hong Kong as a residence, it didn’t accuse him of acting illegally.

(Editor's note: It is a mark of how the media feeding frenzy around HSBC and Switzerland now is that when a person such as Gulliver - who has moved around the world with his job - chooses to set up an offshore account, that it is almost automatically assumed by some that this is questionable. But it isn't. With executives travelling the world with their work, it makes perfect sense to keep their financial affairs in an established centre rather than constantly move their own accounts. This may shock some campaigners, but banking offshore isn't just, or is any more, about tax.)


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