HSBC Boss Gulliver Explains His Swiss Account

Ed Balls has accused the Government of turning a "blind eye" by employing a former HSBC chairman, as the bank's current chief executive denied any wrongdoing amid revelations he had cash in the bank's private Swiss offshoot.

The Guardian claimed CEO Stuart Gulliver - who announced the bank's full-year results this morning - kept $7.6m (£4.93m) via an account held by a Panamanian company.

During an exchange in the House of Commons on Monday afternoon, shadow chancellor Mr Balls attacked George Osborne over the Government's record on HSBC.

He asked a series of questions to find out why it appointed HSBC's ex-chairman Lord Green to be a trade minister, after HM Revenue and Customs had already been made aware of cash held in the bank's Swiss subsidiary.

Mr Ball told the Commons: "It is not good enough for this Chancellor to shout and bluster and try to sweep ... questions under the carpet and claim he didn't ask these questions.

"He has been the chancellor for five years since the government was given the files.

"Isn't it clear that either he and the Prime Minister were negligent in failing to act on the evidence ... about HSBC and Lord Green or ... didn't they just deliberately turn a blind eye?"

It prompted Mr Osborne to respond: "The whole house can see that the person bringing this question to the house is the person with the most to answer for.

"Every single one of these alleged offences occurred when he was the principal tax adviser to the last Labour government."

Lord Green, who was chairman of HSBC from 2006 to 2010, was under considerable pressure to answer questions about the behaviour of the bank's Swiss division before he stepped down from financial services body TheCityUK's Advisory Council on 14 February.

Leaked files detailed in The Guardian reportedly showed that in 2007 the bank's current chief executive Mr Gulliver was the beneficial owner of an account held by Worcester Equities Inc, though Mr Gulliver has insisted no tax was dodged in any jurisdiction.

He explained it was set up in the name of the Panama-based company to prevent HSBC staff in Hong Kong and Switzerland from knowing how much he was paid in the 1990s.

The account has since been closed as his pay is now disclosed to shareholders.

The disclosure was made amid the ongoing scandal over claims HSBC's Swiss private banking arm helped wealthy clients evade and avoid tax, and provided services to criminals including arms dealers.

Derby-born Mr Gulliver has now spoken to journalists of the "shame" felt by staff, having apologised for the behaviour of the Swiss division in national newspaper advertisements last week.

He insisted the private bank had been "completely overhauled" since 2007, when whistleblower Herve Falciani opened the door to the scandal, stealing company data and passing it to French authorities.

Swiss prosecutors have launched a criminal investigation into allegations of money laundering after raiding the bank's offices in Geneva.

The 55-year-old - who received a £7.3m reward package last year - is legally domiciled in Hong Kong after working there for many years, despite now working in the UK.

Representatives for the banking boss told The Guardian he had paid his bonus payments into HSBC Suisse until 2003.

They said Hong Kong tax had been paid and that Mr Gulliver had also told the UK taxman about the account a "number of years" ago.

MPs are set to grill HMRC tax officials on Wednesday over accusations they failed to act properly on the leaked files and potential evidence of tax evasion by more than 3,000 Britons.