Business

Ex-HSBC chairman Lord Green steps down from The City UK

Lord Green Image copyright afp/Getty Images
Image caption The City UK praised Lord Green's integrity

Ex-HSBC head Lord Green has stepped down from a leading financial services body, amid claims HSBC may have enabled tax avoidance when he was in charge.

The City UK said Lord Green had chosen to resign as advisory council chairman to avoid damaging its effectiveness.

The peer, who served as a Tory trade minister, has not commented on leaked files from 2005-07 that suggest HSBC's Swiss private arm helped clients avoid or evade tax.

He was HSBC chairman from 2006 to 2010.

Chairman of The City UK's board, Sir Gerry Grimstone, said: "Stephen Green is a man of great personal integrity who has given huge service to his country and the City.

"He doesn't want to damage the effectiveness of The City UK in promoting good governance and doing the right thing, so has decided to step aside from chairing our advisory council. This is entirely his own decision."

Sir Gerry will take on Lord Green's role, which the peer had held for less than a year, alongside his current position.

Lord Green became HSBC chief executive in 2003 before serving as chairman from 2006 to 2010. He was later made a Conservative peer and was a trade minister until 2013.

Wealthy clients

The HSBC tax scandal broke earlier this week after it was revealed the banking giant may have helped wealthy clients across the world evade tax.

Some 7,000 clients based in the UK were identified, including 1,100 who had not paid their taxes.

A total of £135m in tax and penalties has since been recovered but only one prosecution has been brought.

The bank has said it is "accountable for past control failures" and is facing criminal investigations in the US, France, Belgium and Argentina, but not in the UK, where HSBC is based.

Shadow Treasury minister Chris Leslie called for a "full and frank" explanation of what Lord Green knew while he was in charge at HSBC.

He added: "There are also mounting questions for ministers, which continue to go unanswered. Did [PM] David Cameron and [Chancellor] George Osborne discuss tax evasion at HSBC with Lord Green?

"Why did they appoint Lord Green as a Tory minister months after the government received these files? Why have we only had one prosecution out of 1,100 names? And why did George Osborne and the Treasury sign a deal with the Swiss in 2012 which prevents the UK from actively obtaining similar information in the future?"

A very senior figure in financial services told BBC business correspondent Joe Lynam that it was "mind bogglingly naive that everyone, especially politicians, should be surprised that people saved large sums of money in Swiss bank accounts".

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