UK banks in alleged Gupta money laundering: I've got proof, says activist

Peter Hain addresses UK House of Lords on alleged laundering of billions of rand

01 November 2017 - 18:40 By Graeme Hosken and Genevieve Quintal
Peter Hain.
Peter Hain.

UK politician and anti-apartheid activist Peter Hain has demanded that global British-headquartered banks be criminally investigated for facilitating the Guptas in the alleged laundering of billions of rand.

Speaking in the House of Lords on Wednesday, Hain called for the UK's law enforcement and financial regulatory authorities to investigate banks allegedly involved in the numerous suspicious transactions.

He has already asked the UK government to press financial authorities in Hong Kong and Dubai to cut all links with the Guptas and the family of President Jacob Zuma.

Hain said the alleged money laundering by the Guptas would be raised in the European Parliament, with an investigation to be conducted into European banks allegedly involved with the Guptas.

He said the money laundering transactions that he wanted UK authorities to investigate related to the transfer for funds from several South African bank accounts to accounts in Hong Kong and Dubai.

Many of these transactions are legitimate but many certainly are not

The funds, which were transferred through multiple transactions into different accounts, were then apparently transferred into other accounts within the UK.

In September, Hain wrote to the UK's Chancellor of the Exchequer, Philip Hammond, asking him to urge law enforcement authorities to track down an estimated R7-billion thought to have been laundered through the Guptas' international networks.

He specifically asked that UK banks HSBC and Standard Chartered along with the Bank of Baroda be investigated.

On Wednesday, Hain told parliamentarians that he had proof of the transactions, which he had sent to Hammond.

“The information shows illegal transfer of funds from South Africa made by the Gupta family over the last few years from their South African accounts, to accounts held in Dubai and Hong Kong,” he said.

“Many of these transactions are legitimate but many certainly are not.”

'Close down this corruption network'

Hain, who has obtained his information from whistle-blowers in South Africa, called on Hammond to ensure that the banks involved were investigated for potential criminal complicity, “to urgently close down this corruption network”.

He said he had been informed by the whistle-blowers that some of the banks were still conduits for the corrupt proceeds.

In September, he had listed 28 names – including members of the Gupta and Zuma families – whom he wanted UK financial regulatory authorities to investigate to see whether they were linked to any money laundering using UK-based banks.

Hain told parliamentarians there had been no criminal prosecutions of financial institutions for money laundering “and very few of other 'enablers' such as lawyers and accountants”. 

“There have been regulatory fines but it is not clear that these are enough to deter banks and other financial players from making their anti-money-laundering compliance regimes a box-ticking exercise rather than a meaningful one.”

My main focus is whether this will help deal with the massive money laundering being organised from the very top of government in SA

He called for amendments to UK legislation to introduce a “failure to prevent” money laundering offence.

“My main focus today is whether this will help deal with the massive money laundering being organised from the very top of government in South Africa, and the Presidency itself.

“South Africa is the victim today, but unless we deal decisively with the financial crime implications for Britain as well, next there will be another sovereign country and yet another – with dire consequential instability for Britain and the global economy.

“In which case sophisticated criminal networks, like the Guptas and the Zumas, will have the last laugh.”

He said corruption within, and money laundering from, a monopoly capital elite around the Zuma family showed that winning the war against financial crime required coordination, influence, action and accountability between multi-jurisdictional law enforcement agencies.

“Money laundering is a key enabler of organised crime, allowing criminals to transmit multibillion-pound illicit funds into the legitimate economy, undermining its integrity and public trust.

“Confronting this is difficult, partly due to fragmented information-sharing arrangements across borders and between banks and law enforcement agencies. It’s all very well to develop better protection for our own country, but without simultaneously enhancing cross-border cooperation, we will not win the war against financial crime.”

He said from his visits to South Africa, he had been stunned by the systemic transnational financial crime network facilitated by the Gupta and Zuma families.

“If there had been more proactive and genuine cooperation between the multi-jurisdictional law enforcement agencies and within and between the banks, which have been moving money for the Gupta-Zuma laundering network, the devastation wrought on South Africa could have been significantly reduced.

“Money laundering almost always requires the complicity, whether witting or unwitting, of financial institutions, in this case, some of those are headquartered in Britain, which are now being investigated by the Serious Fraud Office, the Financial Conduct Authority and the National Crimes Agency.”

He said there were disturbing questions that now needed to be answered about the complicity, whether witting or unwitting, of UK global financial institutions in the Gupta-Zuma transnational criminal network and these institutions’ “wilful blindness”.

- TimesLIVE/BusinessLIVE