Cape Town - UK Parliamentarian Lord Peter Hain has said that South African staff at global bank HSBC warned the bank’s London headquarters of illegal transactions related to the controversial South China Rail-Transnet locomotive deal, but were “ignored”.
Warnings that the bank may have been complicit in “theft and money laundering” were not acted on, Hain wrote in a letter to a staff member at the UK’s Financial Conduct Authority (FCA).
The contents of the letter, which Fin24 has a copy of, was first reported in the Daily Maverick on Thursday.
Hain earlier this month told the UK House of Lords that he has copies of illegal transactions from Gupta-linked companies to banks in the United Arab Emirates and Hong Kong, which show the work of a "criminal network".
In this speech, he said he hand-delivered printouts of the transactions to UK Chancellor Philip Hammond, named the bank involved, and asked for an investigation.
Hain did not name the bank in his speech, but sources soon told Bloomberg that it was HSBC.
In his new letter, Hain starts by sketching what evidence he has already provided to UK authorities based on an “expert source”.
“The transaction records which I had delivered to the Treasury and I assume now in your possession include the 21% kickbacks from South China Rail transferred to Gupta Brother HSBC accounts in Hong Kong, amounting to about R5bn over two years,” he writes.
“These relate to the now infamous Transnet locomotive deal. The records show how the Guptas would then split the money into multiple accounts in a typical money laundering fashion through multiple transfers. Also money was transferred to HSBC accounts in Dubai.”
The Guptas have denied any wrongdoing.
He then writes: “An important part of this is that HSBC SA staff had visibility of the Hong Kong accounts and warned London this was theft and money laundering. However London HSBC ignored that warning, presumably deliberately, and so no action was taken to prevent this illegal banking activity.”
HSBC did not immediately reply to a request for comment. Last week it was reported that HSBC had closed bank accounts linked to Gupta family front companies.
Hain, a Labour Party member who spent part of his youth in South Africa, then poses a number of questions for “regulators and investigators as well as HSBC” in his letter.
These include why a “typical pattern of money laundering” was not picked up, whether HSBC reported any suspicious transactions to regulators, and whether any of the money can be traced.
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