UK banks may have been unwittingly involved in South African corruption

Lord Peter Hain an ACTSA honorary vice president has written to the UK Chancellor of the Exchequer, Philip Hammond advising him that two UK banks may have been unwitting conduits in the illicit siphoning of millions of pounds from South Africa.

Speaking on the matter in the House of Lords last week, Lord Hain advised that he had been notified by whistle-blowers in South Africa that the UK banks HSBC and Standard Chartered banks may have inadvertently been involved in the movement of up to £400m of illicit funds. The money is alleged to have been siphoned from the country, passing through Hong Kong and Dubai, both locations where the two British financial institutions hold a significant presence. In an interview with the BBC World Service Lord Hain reiterated that there is no allegation of wrongdoing on the part of the banks but stated it is his hope that the banks will attempt to regain funds illicitly removed from the country.

In response to Lord Hain’s letter the UK Chancellor stated ‘The UK government takes allegations of corruption and money laundering extremely seriously and is committed to preventing the proceeds of corruption from entering the UK financial system.’  The Treasury has also issued a statement affirming that the case had been passed on to the Serious Fraud Office, National Crime Agency (NCA) and the Financial Conduct Authority (FCA) with the request that they look into the involvement of the British banking groups.

This is the latest scandal in the ongoing inquiry into the alleged corruption scandal involving President Jacob Zuma and the influential Gupta family. It is alleged that the powerful business family the Guptas bought political influence with the government for their own financial gain. A phenomena referred to in South Africa as ‘state capture’. Lord Hain’s allegations state the illicitly transferred funds in question were stolen from the South African taxpayer as a result of the ‘corruption and cronyism’ of President Zuma and the Guptas. Both President Zuma and the Guptas strongly deny any wrong-doing , stating they are the victims of a “politically motivated witch hunt”.

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Robyn K