UK banks 'exposed to money laundering in South Africa'

http://www.bbc.com/news/business-41672793

UK banks 'exposed to money laundering in South Africa'

56 minutes ago

From the section Business

The UK Chancellor has asked financial regulators and the Serious Fraud Office to review whether banks HSBC and Standard Chartered are linked to a corruption scandal in South Africa. Lord Peter Hain has raised concerns the banks may "inadvertently have been conduits" for laundered money. The Labour peer is due to raise the issue in the House of Lords later. The Treasury said it had sent Lord Hain's comments to financial regulator the Financial Conduct Authority (FCA).

Lord Hain told the BBC he had written to Chancellor Philip Hammond saying a whistle-blower had indicated the banks "maybe inadvertently have been conduits for the corrupt proceeds of money". The peer is due to raise the issue in the House of Lords later.

A Treasury spokesman said: "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," a spokesperson said.

The BBC's correspondent in Johannesburg, Andrew Harding, said Lord Hain's letter was "a new twist in a giant corruption scandal that is shaking the South Africa state, and damaging the reputations of a number of global companies".

At the centre of the allegations are South Africa's President Jacob Zuma and a wealthy business family, the Guptas. Mr Zuma and the Guptas strongly deny wrongdoing, and say they are victims of a "politically motivated witch-hunt". But leaked emails and official investigations have fuelled claims that the Guptas have bought influence in government in order to loot state enterprises.

In South Africa, the scandal has already ruined British public relations company Bell Pottinger and damaged auditors KPMG, which removed its top executive team in the country.
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