Business Comment

Terry Murden: Lord Green must reveal what he knew at HSBC

Stephen Green(Updated) Critics of the banks, and they are an abundant lot, once again smell blood, and Lord Green must feel his days of refusing to comment on the HSBC scandal are numbered.

As plain old Stephen Green he was chairman of Britain’s biggest bank as it strode the world’s financial markets and made millions for its shareholders. Those days must seem a long time ago following the allegations that it helped customers avoid paying tax.

The bank has bought full page space in the form of  a letter in a number of Sunday newspapers to offer its “sincerest apologies” for its behaviour. The letter is signed by chief executive Stuart Gulliver who says the reports in the media had been a “painful experience” for its customers, shareholders and employees. “We must show we understand that the societies we serve expect more from us,” he writes.  “We have absolutely no appetite to do business with clients who are evading their taxes or who fail to meet our financial crime compliance standards.”

Well, it’s a start. But is it enough? Hand-wringing apologies are no substitute for corrective action. The bank says it has cleaned up its act since 2007 and we must take it at its word. But Mr Gulliver and his boardroom chums will be back at work tomorrow and no doubt it will be business as usual. Will anyone leave? Doubt it. Will there be an internal inquiry? There surely must be. But it has to be more than a simple box-ticking exercise to satisfy the regulators and avoid further investigation.

As for Mr Green, he  headed the bank during the time when it was helping thousands of customers avoid paying tax to their domestic revenues. He refuses to speak about it, a tactic that is not proving particularly helpful as the glare of publicity threatens to engulf him.

His resignation this weekend from TheCityUk’s advisory body, a lobby group for the sector, was described by the organisation’s chairman Sir Gerry Grimstone as “entirely his own decision”. That may be so, but it cannot have been made without reference to the clamour of attention surrounding his time at HSBC and demands for an explanation about what he knew.

Some are saying he has become an embarrassment to the organisation and the City itself. If he has a valid explanation for what happened and for his involvement in dealing with it, then that will get him off the hook. So let’s hear it.

He is a committed Christian – a God-fearing businessman – and one assumes he is praying to the almighty that this problem will go away and the media will leave him alone.

More seriously, he is a former trade minister who clearly forgot to mention in the interview for the job that his former employer had been advising its clients how to avoid paying his potential new employer all the taxes it believed it was due.

Lord Green must surely have known what was taking place on his watch. After all, banking is about serving the client, and the richer the client the more interested the bank becomes.

It is inconceivable that the board did not know that its private Swiss bank was helping these well-heeled clients keep their hands on most of their money. After all, the more successful the bank was in achieving this objective, the more profit it made. As chairman, there would be no excuse for not knowing what is going on in their organisations. Lesser employees would be sacked for less.

The Treasury Select Committee is expected to call senior HSBC figures to give evidence on the allegations later this month. It must include Lord Green on the guest list.

Leave a Reply

Your email address will not be published. Required fields are marked as *

This site uses Akismet to reduce spam. Learn how your comment data is processed.