Argentina orders HSBC to replace local boss

People walk past an HSBC branch in Buenos Aires, Argentina Image copyright Getty Images

Argentina's central bank has ordered HSBC to replace its chief executive in the country within 24 hours and accused the bank of failing to prevent tax evasion and money laundering.

In November Argentine authorities charged HSBC with helping more than 4,000 clients evade taxes.

The bank was accused of helping clients hide money in Swiss bank accounts.

HSBC rejected the charge and said in a statement that it complied with Argentina's laws.

The central bank said that HSBC Argentina's president and chief executive, Gabriel Martino, "had not directed the necessary measures to mitigate and adequately address the prevention of money laundering and the financing of terrorist activities."

HSBC responded by saying: "HSBC Argentina continues to operate normally in the country.

"HSBC Argentina complies with the laws and regulations that govern its activity in the country and will continue cooperating with the Justice and regulators in Argentina."

Offshore accounts

Ricardo Echegaray, head of Argentina's AFIP tax agency, called the central bank's move "positive".

He said the bank's clients who had moved money abroad through secret channels should accept criminal liability and pay the taxes owed.

"They will have to recognize that together with Martino, and the HSBC authorities here in Argentina, they looked to cheat Argentina, to move funds abroad that they had never declared and on which they had never paid taxes," Mr Echegaray told a press conference.

In March Argentina ordered HSBC to return $3.5bn (£2.3bn) from offshore accounts.

Argentina's central bank has the authority to revoke the licenses of officials who legally represent commercial banks before the financial regulator.

HSBC is already facing investigations in several countries over allegations it helped clients dodge taxes.

In February, two senior HSBC executives apologised for "unacceptable" practices at its Swiss private bank which helped clients to avoid tax in the UK.

At the time Stuart Gulliver, HSBC group chief executive, said the behaviour of its Swiss unit had caused "damage to trust and confidence" in the company as a whole.

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