The former chief executive of HSBC Private Banking Clive Bannister and his successor Chris Meares are facing an investigation into alleged money laundering at the Swiss operations of the bank.
They are among a number of top bankers which Spain’s High Court wants to question in its probe, and include former HSBC Private Banking chairman Peter Widmer and other HSBC bankers. Santander and BNP Paribas executives are also to be questioned.
At the centre of the Spanish case are accusations that HSBC helped Spanish clients to transfer abroad and later repatriate funds “with the intention of hiding them from the public treasury”, the High Court said.
Between 2005 and 2008, HSBC's Swiss private bank channelled almost EUR 74 million via Santander to pay clients at other banks, according to the court ruling from judge Jose de la Mata.
The transfers had stopped by 2010, after the banks began to request identification from people making and receiving transfers.
The court decided to summon executives from the three banks after analysing documents provided by Santander and BNP Paribas as well as reports from Bank of Spain inspectors.
The Spanish investigation is one of several by national tax authorities as a result of the leak in 2008 of client data belonging to HSBC's private bank by Herve Falciani, a former HSBC IT employee. France, Austria, Belgium and Argentina have launched their own investigations.
Mr Falciani, a French citizen, has confessed he was a whistleblower trying to help governments track down citizens who used Swiss accounts to evade tax. In 2015 a Swiss court sentenced him, in his absence, to five years in prison for aggravated industrial espionage. As many as 30,000 client accounts were disclosed in the infamous “Swiss-leaks” affair.
Mr Bannister is now chief executive of UK insurer Phoenix Group. He was the architect of a huge private banking deal by HSBC in the acquisition of the wealth businesses of Republic National and Safra Republic in 1999. He left HSBC in 2010 while Mr Meares departed in 2011 and was for a time with Quilter Cheviot.
The Spanish court action comes as HSBC continues to spend heavily on compliance and money laundering regulations which has beset it in recent years.
The outlay on regulatory programmes and compliance rose 12 percent to $800 million in the first three months of 2017, the bank disclosed in its latest earnings announcement. Its private banking division also lower profits in the quarter as the bank continued a restructuring to base private banking primarily on the UK and Hong Kong.
HSBC and BNP Paribas have declined to comment on the Madrid action while Santander said in a statement it had complied with the law at all time and had actively cooperated with the court by providing all the documentation and information requested.