FT Alphaville has reported this morning that:
A senior UBS private banker allegedly sanctioned the creation of an illegal offshore investment vehicle for one of India's most powerful businessmen, saying that Anil Ambani's status as a “mega-client” could justify waiving the rules, a London tribunal has been told.
The FT says the claim, contained in email evidence submitted to the hearing this week, has been made in a case brought against two of UBS's former wealth management executives by the UK's financial regulator.
The evidence shows that Kurt Kumschick, the Swiss bank's recently deceased former marketing head for wealth management in the India-Pacific region, told two junior colleagues that whether the bank should create the Mauritius-based investment vehicle for Mr Ambani would be a “business decision” if the bank could not confirm its legality under Indian law. Mr Kumschick died this week, according to UBS officials. His estate has no representation at the tribunal.
Now, I stress, it's just an allegation.
But we've seen this attitude to the law too often from financial services companies. And the penalties need to be very high indeed.
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Richard you note: – “we’ve seen this attitude to the law too often from financial services companies. And the penalties need to be very high indeed”
But what the hell were the auditors doing?
The Big4 and the joke known as the ICAEW are partly responsible for what could be kindly termed as “aiding in the concealment of major irregularities”.
Just a few of an assortment of fraudsters that relied on “fiddling-the-books” …
Madoff — Ponzi Scheme
Lehman Bros – Cosmetic accounting gimmicks
Aleef Garages – Convicted of tax fraud.
Enron – Plus the NatWest Three
Nick Leeson — And his account number 88888
Robert Maxwell – Pension Fund fraud
Frank Abagnale — Given early release to act as unpaid adviser to the FBI!.
And many, many more.
These people got away with it courtesy of accountant/auditor failure.
But for some reason few people seem to mention this!
India is suffering greatly by the Mauritus route being used by the crooks and their advisors, what ever their Nationalities.
Capital Gains Tax is not being paid by Vodafone by using offshore companies
3 States in India are poorer then Sub Sahara Africa
Many farmers are committing suicide because they can not cope with the debts.
Tax needs to be paid where the customer resides and not avoided by all means legal or illegal.
The Bifg 4 are only looking after Number 1 example Olympus recently.
Dear Richard Murphy
Found this video of dylan ratigan, with quests, david cay johnston and william black, discussing tax.
http://www.economicpopulist.org/content/making-money-through-extraction
Dylan Ratigan has defined a new economic term, extraction, to be how today’s financial sector sucks money out of America’s pockets and invents more riches for themselves. Financial extraction is taking money from the real economy instead of adding and creating a production economy. A production economy is that ancient historical period of 35+ years ago where the United States created a strong middle class and high paying jobs.
Some of this economic extraction is done through the tax code. David Cay Johnston and Bill Black in the segment below talk about how the corporate and personal tax code is rigged to extract money from economic activity that creates a strong middle class and and instead gives it to Wall Street and the Rich.
The tax system is unfair. For example why is it that there is no National Insurance on dividends.
For example £35,000 paid in dividends to a shareholder has no charge to National Insurance.
The same money paid to a sole trader costs class 1NI of 8.1% and if you are an employee 11%.
Where is the fairness.
Margaret Thatcher created this unfairness in order to nationalise BT and BG.
The FT this weekend has a full page on UBS employees being fined for lying and setting upthe $250m fund for Ambani. The laughable thing is that Ambani is not in prison nor these bank employees who lied and committed fraud on India. The employees argue that UBS management forced them through the incentives system of increasing Profits to take this action. ut no UBS director has been fined or sent to prison either.
The point is that the system is crooked and people do not go to prison either in India or the UK never mind in Switzerland.
This is another example where Banks are encouraging flight of funds.
An unprecedented exodus of capital from Greece — peaking in a record number of withdrawals from banks in recent months — has exacerbated the liquidity crisis now wracking the recession-hit country.
The latest figures released by the Bank of Greece reveal that in September and October alone investors pulled €12.3bn (£10.3bn) from domestic banks, spurred by fears of political uncertainty and economic collapse.
Overall, outflows have reached a record 25% since September 2009 — when household and corporate deposits stood at a peak of €237.5bn, the data showed.
Foreign banks with branches in Athens were facilitating the cash flight, the newspaper claimed, by encouraging Greek depositors to set up bank accounts abroad. The Swiss banking groups UBS and Credit Suisse had made it much easier for investors to open accounts in Geneva and Zurich by simplifying procedures.”In this way, they are putting the nail in the coffin of liquidity in the Greek financial system,”
Guardian
What about Arthur Adnerson, did not they disappear after the Enron debacle. Also anyone remember that Thatcher banned A from doing any government related work because of their role in the DeLorean debacle, shame we do not have a similar tough people in power today.