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BBC Trust chair asked to resign amid HSBC revelations

HSBC's leaders faced another session of intense questioning in the UK as the fallout over Swiss Leaks continues.

Rona Fairhead.

The chair of the BBC Trust has been urged to resign by an influential British MP after a second grilling of HSBC’s bosses over the bank’s alleged role in widespread tax avoidance through its controversial Swiss branch.

Rona Fairhead, chair of the BBC Trust and chair of HSBC’s audit and risk committee, appeared alongside HSBC chief executive Stuart Gulliver and former head of global private banking Chris Meares before the public accounts committee (PAC) on Monday. Gulliver had previously been called before the Treasury select committee on the same topic.

The trio faced intense questioning from MP Margaret Hodge and othe members of the PAC about revelations managers at the Swiss bank actively promoted tax avoidance strategies to clients, and what action had been taken to reform the bank.

Fairhead repeatedly denied seeing any evidence of tax avoidance or evasion during her 10 years as a non-executive director for HSBC, and said the audit committee was “horrified” at allegations the bank’s clients evaded taxes, but said she couldn’t be held responsible.

“First and foremost, the people who are most culpable are those people who evade taxes. I also hold the frontline who were breaching the policies of this bank accountable. But I also hold accountable the management in country the most, because they should have created a controlled environment,” Fairhead told the PAC.

Margaret HodgeBut Hodge wasn’t satisfied with the answers, and told Fairhead she had “lost my trust” as chair of the BBC Trust.

“Either you colluded in tax evasion or you didn’t know. In that case you are either incredibly naive or totally incompetent. The performance you have shown here as a guardian of HSBC does not give me confidence as a licence fee-payer in your ability as a guardian of the licence fee-payers’ money,” Hodge said to Fairhead, referring to the licence fee paid by British taxpayers to keep the BBC running.

“I really do think that you should consider your position and you should think about resigning and if not, I think the government should sack you.”

Fairhead rejected the call for her resignation, and said the bank had been “unyielding” in its commitment to reform each time an issue was raised. 

“I think we’ve been quite clear about where the responsibility lies. In terms of the oversight, I could only respond to the information that I had,” she said.

The PAC itself faced some criticism for failing to call former HSBC chief and UK trade minister Stephen Green to answer questions about his knowledge of and potential role in controversies at the bank.

According to the Guardian, Labour MPs have called for Lord Green to face committee questioning over the HSBC affair, but the move was blocked by Conservative MPs

HSBC will face further scrutiny on Thursday when Tanzania’s public accounts committee turns its attention to the affair with a public hearing featuring the head of the country’s tax authority and its central bank governor. The Swiss Leaks project revealed how some of the bank’s clients included arms dealers and diamond traffickers linked to numerous scandals throughout Africa

The bank could also faces growing pressure from officials in Argentina who are seeking to repatriate $3.5 billion held by Argentines in Swiss bank accounts. On Monday the head of the Argentine tax authority called on HSBC to publicly denounce alleged tax evasion at the bank's subsidiary in the country.

Meanwhile, ICIJ media partners have continued to publish more stories based on the Swiss Leaks files.

In Malta, ICIJ partner The Malta Independent reported revelations that two former government ministers held Swiss accounts, including one with more than $3 million allegedly undeclared, has caught the government by surprise and led to calls for an investigation.

In Montenegro, Djordjina Marovic, wife of former president of Serbia and Montenegro Svetozar Marovic, has been linked to a Swiss HSBC account that at one stage contained $3.8 million, according to ICIJ partner OCCRP. The account was not reported as part of the former president’s asset declarations. 

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