via Zimbabweans Allegedly Linked to $270 Million Stashed in HSBC Foreign Bank Accounts – VOA Zimbabwe 9 February 2015
WASHINGTON DC — An international banking giant, HSBC, made huge profits by allegedly engaging in shady deals of over $270 million with some Zimbabwean citizens seven years ago, in the process, disadvantaging the poor southern African nation of the much-needed foreign currency, documents in Studio7’s possession have revealed.
These secret documents, obtained from the French newspaper, Le Monde, by the renowned International Consortium of Investigative Journalists (ICIJ), a Washington-based journalist organization with members from more than 65 countries, including Zimbabwe, cover bank accounts up to 2007 said to have allegedly belonged to 198 clients connected to Zimbabwe by birth, or residence, amounting to $272 million.
The account records also show that HSBC in 2006/7 had accounts holding about $102 billion deposited by individuals and companies from 203 nations, Zimbabwe included.
The dealings between HSBC’s Swiss private banking arm show what some banking experts in Washington, who requested not to be identified, described as “illegal behavior by the bank, especially in hiding millions of dollars from tax authorities the world over.”
TOP LIST
Topping the list of individuals from Zimbabwe are politicians, doctors, business people, farmers, sports people and what the document refers to as “housewives”, though further investigations by Studio7 reveal that some of these so-called ‘housewives’ are directors of private companies and trusts.
The documents reveal that some of the political figures include former Zanu PF senator, Aguy Clement Georgias, who owns Trinity Engineering and a trucking company; the late Zanu PF youth boss and Zimbabwe Air Force commander, Air Marshal Josiah Tungamirayi; cricketer, Stuart David Robertson; businessman, Frederick Mutanda, chairman of Caps Holdings and the Patel family, among others.
Mukanda did not answer his phone, and Robertson was not reachable.
Georgias, whose account is now listed in the documents as closed, was added on the European Union (EU) sanctions list in April 2007, following his appointment as economic development deputy minister by President Robert Mugabe. He was removed from the sanctions list in February 2011.
The controversial politician took the EU to court claiming 6 million euros in loss of business after he was denied entry into Britain in 2007. But the EU’s general court rejected his application.
Georgias did not answer his phone when Studio 7 contacted him for comment.
MONEY WITHDRAWALS
According to documents in Studio 7’s possession, clients allegedly traveled to Geneva to withdraw huge sums of money, and in some cases, some of them were said to have been advised by HSBC on how to take a range of measures to avoid paying taxes in their home countries.
For example, on January 27, 2005 a Zimbabwean client (name supplied) met HSBC staff in Cape Town and was advised on how to take $500,000 in cash to support his son’s credit card request. The son had to emigrate to California to supervise property investments there by the client.
These internal discussions between the bank and clients will be made available tomorrow, including the amounts each individual had with the bank.
Reacting to reports of these alleged transactions, former finance minister, Tendai Biti, told VOA Studio 7 the suspected offshore banking by Zimbabweans indicate that the money did not come from a legal source. “One cannot send money outside Zimbabwe without the central bank knowing. At the time the transactions were made, the Zimbabwean laws were very strict when it comes to foreign exchange.”
Biti, who is a corporate lawyer, said the economy was on its knees when the transactions were made. “Most foreign currency was bought on the parallel market and it was difficult to trace it. Although there is no law that stops Zimbabweans from opening bank accounts in other countries, the law requires all residents to declare interest earned when filing tax returns.”
HSBC RESPONSE
In response to ICIJ inquiry, HSBC, with head office in London and offices in 74 countries and territories in six continents, admitted that its compliance culture and standard of due diligence in its Swiss private bank, as well as the industry in general, were significantly lower than they are today.
HSBC added that it had taken significant steps over the past several years to implement reforms and exit clients who did not meet strict new HSBC standards, including those where it had concerns in relation to tax compliance.
The bank further said, “As a result of this repositioning, HSBC’s Swiss private bank has reduced its client base by almost 70% since 2007.”
Asked for comment, a former senior government official who requested anonymity said, “Every truthful person knows that the hyper-inflation in Zimbabwe was not just the result of money printing pinned on former central bank governor, Dr. Gideon Gono’s door, but was also caused by a lack of foreign currency in Zimbabwe to buy raw material inputs for improved capacity utilization by the private sector.”
The official, who is a Zanu PF member, said any form of externalization of foreign currency into any foreign bank worldwide was a direct attack on the Zimbabwe’s economy.
MORE FOREIGN BANK ACCOUNTS
The official said the amount revealed in the Swiss account of HSBC was a tiny fraction of the estimated $4,5 billion in Zimbabwean money allegedly stashed in other banks in Switzerland, and almost up to $3 billion stashed in South Africa, Virgin and Cayman Islands, in offshore tax havens like Guernsey, Mauritius, Seychelles, Singapore, Malaysia, Australia, China and Dubai.
“Zimbabwean people and business operators are some of the most unpatriotic and crafty people on this planet when it comes to economic patriotism and the monetary love for their country. Given the chance, they would sell the country and stash the money very very far away from Zimbabwe itself,” said the official.
Finance Minister, Patrick Chinamasa, was not immediately available for comment. Gono’s number was not reachable.
HSBC 1,9 BILLION FINE
HSBC was fined $1,9 billion in 2012 by the US’s Senate Permanent Subcommittee on Investigations for allowing drug cartels to launder hundreds of millions of ill-gotten dollars through its US operations.
- Ray Choto is a member of the International Consortium of Investigative Journalists working with other ICIJ members on the HSBC scandal
COMMENTS
We were told, unilaterally, that our accounts were to be closed, no reason given, two years ago. It was a complete shambles. Illicit gold and diamond dealings, plus the fact that there is a firearm factory out at Mount Hamden, eventually was the reason. I had an account with Midland, then HSBC for over 40 years. They deserve all they get. Greedy, un businesslike ba……rds. I hope they get all they deserve.
When I was in Geneva I was shocked with the facilities this HSBC bank has at their disposal as compared to other banks.My shock was explained by the fine they got from the Americans who know how to deal with corrupt system.For many years this bank has encouraged dictators and money launderers to hide huge amounts at the expense of the poor masses worldwide.
Mr Ray Choto try to get the list of Zimbabweans involved released so that the nation knows where our minerals money is hiding.The only wayto stop the rot is to expose these individuals and their accomplices.
Well Said “Mixed Race” list of names wanted- open the can of worms as the saying goes
Dennis your nomiker and email address appeared in my boxes. Not sure what’s going on at Zimsit.
The crime is not in Externalising forex one has earned – it is our Property – the crime in in taking mOney someone else has earned for personal gain and political Patronage and in exchange knowingly handed over worthless cheques. When the city cOuld not get forex to Purify our water RBZ was imPorting “things” for which it did not pay duty. The bank was sued by ZIMRA. Of c
Of course the “things” could not be identified in court for “national security reasons”. HSBC and other banks must disclose all account holders who must then explain from where the funds came (possibly plastic bOxes On aeroPlanes?). We have been systematically Robbed. No wonder no One wants to bank here!
A direct attack on the Zimbabwe economy was when government would take hard earned forex from exports etc and give you 10% of its value based on a hypothetical exchange rate creating losses for the companies or individuals. A direct attack on the economy was when government would simply take your forex from local forex accounts which were being saved for raw materials/equipment and the like, and tell you to put all your plans on hold as it used you capital, interest free, for an indefinite period for its own prioritites such as new mercs and twin cabs as well as trips overseas and the like.
I cannot blame anyone who took opportunities to keep their money where it could not be touched by the bottomless pit which was government spending at the time.
Finding loop holes in systems for the benefit of you clients is not shady. It is expected from financial institutions.
By the same token I pay my taxs and expect everyone else to.