HSBC to pay 300 million euros to avoid French tax fraud trial

HSBC Private Bank, a Swiss unit of banking giant HSBC, has agreed to pay 300 million euros ($352 million) to avoid going to trial in France for enabling tax fraud, prosecutors said Tuesday. HSBC was accused last year of helping French clients to hide at least 1.67 billion euros from the tax authorities, according to a source close to the probe.
The deal struck between the financial crime prosecutor''s office and the bank is a first in France under a new procedure that allows companies under suspicion of corruption or dissimulation of tax fraud to negotiate a fine to stop a case from going to trial. The deal does not include a guilty plea and French prosecutors have now dropped the case against HSBC Holdings.
Investigators believe that HSBC''s private banking division offered its customers several ways of hiding assets from the French taxman, notably via the use of offshore tax havens. The banking giant was at first accused of failing in its supervisory role over its private banking division, but further investigation led to suspicions that HSBC "participated actively in the fraudulent practices", the source close to the investigation said.