Business

Credit Suisse CEO defends bank over Panama Papers

HONG KONG: The CEO of Credit Suisse said Tuesday the bank does not endorse offshore accounts for tax avoidance or shady dealings, the latest bank to defend itself against accusations made in the Panama Papers leak.

The scandal erupted on Sunday when media groups began revealing the results of a year-long investigation into a trove of 11.5 million documents from the Panamanian law firm Mossack Fonseca, which specialises in creating offshore shell companies.

Among those named in the “Panama Papers” are close associates of Russian President Vladimir Putin, relatives of Chinese leader Xi Jinping and Iceland’s Prime Minister Sigmundur David Gunnlaugsson, as well as Barcelona striker Lionel Messi.

Major international banks, including Credit Suisse, were also named in the leak among those that requested the most offshore companies for clients.

Offshore companies are not illegal and can be used for legitimate business needs, but commonly feature in corruption cases where they are used to secretly move ill-gotten gains abroad.

Credit Suisse CEO Tidjane Thiam said Tuesday they would only endorse “legitimate” offshore arrangements.

“We only accept offshore structures, vehicles if they serve legitimate purposes,” Thiam said, speaking in Hong Kong.

“Clearly, tax avoidance is not one of those,” he added.

“We insist on knowing who is the beneficial owner. If it’s not revealed, we will not engage in business with that entity,” he added.

His comments come after HSBC, another bank on the list of institutions that helped set up the most offshore accounts, also distanced itself from the revelations.

“The allegations are historical, in some cases dating back 20 years, predating our significant, well-publicised reforms implemented over the last few years,” spokesman Gareth Hewett told AFP in an emailed statement.

Hong Kong is under the spotlight after the leak showed the city topped the list of territories where intermediaries operate between Mossack Fonseca and its customers, with the United Kingdom and Switzerland second and third on the list.

Hong Kong film star Jackie Chan was revealed to have at least six companies represented by Mossack Fonseca, though he may have used the companies legitimately for business purposes rather than for tax avoidance.

The Guardian newspaper reported that executives from Hong Kong-based Sun Hung Kai, the city’s biggest property developer, were also named in the leak over compliance issues with Mossack Fonseca.

Three executives from the company, including former co-chairman Thomas Kwok, were jailed for corruption in Hong Kong in 2014 over handouts to the city’s former deputy leader Rafael Hui, who was also convicted.

The trove of Panama Papers documents was anonymously leaked to German daily Sueddeutsche Zeitung and shared with more than 100 media groups by the International Consortium of Investigative Journalists (ICIJ). More revelations are expected over the coming weeks.

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