JOHANNESBURG — Lord Peter Hain, an MP in the UK House of Lords, possesses information that could rock banking giant HSBC as well as the Zupta empire. Writing to the Private Secretary to the CEO of UK’s Financial Conduct Authority, Kenneth McArthur, earlier this month, Hain described how whistleblowers indicated that HSBC’s London head office chose to ignore warnings from its South African staff about clear signs of money laundering involving the Guptas. Hain, who has not named the whistleblowers in order to protect their identities, described in his letter to McArthur how the Guptas split large amounts of money into different accounts – a classic sign of money laundering. All the money flowed from lucrative state contracts in South Africa where Gupta fronts skimmed billions from those deals. Hain’s latest revelation follows his address to the House of Lords earlier this month where he announced that he had handed over documents to the UK Treasury revealing details of money laundered by the Guptas from South Africa through the UK into Hong Kong and Dubai. Just like he was a thorn in the side of Apartheid leaders, Hain is set to make life very difficult for the looting Zuptas. Below is an email that Hain has allowed us to publish – the email is dated November 7. – Gareth van Zyl
By Lord Peter Hain*
Dear Kenneth McArthur
I thought it might help with the investigation if I added some details provided by the expert source I have.
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 2 years. 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 missing leg is records of transfers from the South African state owned enterprise Transnet via Nedbank and Standard Bank to South China Rail accounts. Those then tie up to 21% commission payments to the Guptas. My source is trying to get those records.
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.
The questions I have for the regulators and investigators as well as HSBC are:
1. How did they not pick up on a typical pattern of money laundering in Gupta and Gupta-related accounts i.e. regular inflows of large amounts being split into more accounts etc.
2. How did the Guptas pass their KYC procedures given their widely-reported involvement in state capture in SA?
3. Why did they continue to do business with the Guptas to this day? Were the fees so lucrative that they overlooked their FIC procedures?
4. Did they report any of the transactions to the FIC given their regularity and size?
5. What do the Dubai account records show? The transactions I supplied in the bundle on 31 October related to Hong Kong accounts only. In what other countries did HSBC open/operate accounts for the Guptas?
6. Can HSBC freeze any of the money in any of those accounts pending investigation?
7. Can they trace any transfers out of HSBC accounts by the Guptas i.e. where is the money now? They will know how the money was spent and/or where it was transferred. So what is needed is all transaction records on the Gupta accounts as they relate to any transfers from South China Rail.
8. Was other money transferred into the HSBC accounts from South Africa? If so, from which originating banks to which HSBC banks and when? Some of the money would have been transferred to shell companies in Dubai and Abu Dhabi.
9. Why did HSBC not follow their own standard FIC procedures when it came to the Gupta accounts?
10. Apart from the Guptas, do they have accounts open for Duduzane Zuma, Salim Essa, Eric Wood etc (all known Gupta associates whose accounts may have been used to launder stolen money)? If so, where? It is important to see all the transaction records relating to all the individuals implicated in the Gupta/Zuma money laundering web.
I look forward to confirmation of receipt of this email and that this will all be investigated thoroughly by the FCA, SFO and NCA.
- Peter Hain is the the Right Honourable Lord Hain of Neath and a member of the UK House of Lords.