The UK Serious Fraud Office may review whether HSBC and Standard Chartered helped launder money linked to a South Africa corruption scandal, the BBC reported Thursday.
A member of the House of Lords said the banks may have handled as much as £400 million ($527 million) in money linked to graft.
In a letter to the UK Treasury, Lord Peter Hain said the banks may “inadvertently have been conduits” for laundered money.
A scandal in South Africa is unfolding about alleged links between President Jacob Zuma and the Gupta family.
The Gupta brothers — Ajay, Atul, and Rajesh — control the Sahara Group. It has interests in technology, mining, media, travel, and energy.
Lord Hain wrote to UK Chancellor Philip Hammond, relaying information from a whistleblower. Lord Hain said the banks “maybe inadvertently have been conduits for the corrupt proceeds of money,” the BBC said.
The whistleblower apparently named 27 people linked to the alleged graft and about a dozen companies.
The Treasury referred Lord Hain’s letter to the Financial Conduct Authority and the SFO.
The BBC quoted a Treasury spokesman as saying: “We take allegations of financial misconduct very seriously, and have passed Lord Hain’s letter on to the Financial Conduct Authority and relevant UK law enforcement agencies, including the National Crime Agency and Serious Fraud Office, to agree the right action.”
In South Africa, President Zuma and the Guptas “strongly deny wrongdoing” and say they are victims of a “politically motivated witch-hunt,” the BBC said.
A spokeswoman for the FCA told the BBC her agency has contacted HSBC and Stanchart and would “consider carefully further responses received.”
The SFO hasn’t commented.
Standard Chartered told the BBC: “We are not able to comment on the details of client transactions, but can confirm that following an internal investigation accounts were closed by us in 2014.”
Both banks are based in London. They haven’t published official statements or released other public disclosures about the report.
Lord Hain grew up in South Africa and campaigned against apartheid.
He said South African whistleblowers told him HSBC and Standard Chartered, together with India’s Baroda Bank, “must have been conduits for the corrupt proceeds of money stolen from their taxpayers and laundered through Dubai and Hong Kong,” according to the Telegraph.
A copy of Lord Hain’s letter is here (pdf).
Richard L. Cassin is the publisher and editor of the FCPA Blog.