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HSBC scam draws in UK trade minister

india Updated: Jul 19, 2012 22:21 IST
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British trade minister Lord Green has been drawn into the HSBC money laundering scandal after the opposition Labour party warned that he has "serious questions" to answer about the way the bank laundered money for drug cartels, terrorists and pariah states while he was at the helm.

Green was chief executive of Britain's biggest bank between 2003 and 2006 and was its chairman until 2010 when he resigned to take up a position in the coalition government.

The bank is still awaiting details of the fine imposed by the US for the offences which cover the period 2004 and 2010. A Senate report has concluded the bank had "pervasively polluted" culture that allowed the its subsidiaries to move billions of dollars around the financial system from countries such as Iran and Syria as well as moving cash for Mexican drug cartels. Some analysts think the fine could be $1 billion.

During a dramatic session before a Senate hearing on Tuesday, HSBC's head of compliance David Bagley resigned after 10 years in the role and after 20 years at the bank.

Chris Leslie, the Labour party spokesman on Treasury matters, said on Wednesday: "The US Senate sub-committee's report, which suggests that HSBC allowed money laundering by drug cartels and possibly even terrorists, is so serious that the bank's head of compliance has already resigned".

"Stephen Green, who was executive chairman of the bank when this took place and is now a trade minister in David Cameron's government, now has serious questions to answer about what he knew and when," said Leslie.

When Green quit as chairman in 2010 he triggered a bitter boardroom row that led to the departure of the then chief executive, Michael Geoghegan, and the promotion of the head of the investment bank Stuart Gulliver to the post.

Green was not immediately available for comment following Leslie's remarks.