HSBC chief apologises for tax practices

HSBC chief executive Stuart Gulliver has apologised to MPs for “unacceptable” practices at the bank’s Swiss subsidiary which he said had caused “damage to trust and confidence” in the company.

Mr Gulliver’s apology came as he and HSBC chairman Douglas Flint were grilled by MPs on the UK parliament’s Treasury Select Committee over what committee chair Andrew Tyrie said were “extraordinary” revelations about tax-avoidance activities linked to the Geneva branch in the mid-2000s.

The HSBC chief executive also defended his personal decision to be paid by the bank via a Panamanian company with an account in the Swiss private bank, insisting that the arrangement was not designed to avoid tax, but to protect his privacy against other members of staff who were able to view employees’ accounts via the company computer system.

Mr Gulliver acknowledged the arrangements looked “puzzling”, but insisted: “There was no tax advantage or purpose whatsoever.”

He said he was a Hong Kong resident and intended to return there after completing his assignment in the UK, but had paid UK tax on his worldwide earnings from HSBC, company dividends and sales of shares.

Asked if HSBC had suffered “reputational damage” from the disclosure of Mr Gulliver’s financial arrangements, Mr Flint said: “Yes”.

“I was not aware of the private arrangements.”

Both bankers insisted they had not discussed the activities at HSBC’s Swiss arm with anyone at the Treasury.

“Certainly I did not discuss the Swiss case with anyone in the Treasury,” Mr Gulliver said.