Among the accounts of interest is one called “Rockland96”, now closed, linked to wealthy gemstone dealer and Machakos Senator Johnston Muthama, the only Kenyan named in the report.
Kenyans are among international clients whose names are featuring in a trove of secret bank files that reveal how HSBC’s Swiss banking arm helped individuals stash billions of dollars in the country.
In total Kenyans are holding Sh51.1 billion in a single Swiss-bank.
The amount is equivalent to what Kenya has budgeted for infrastructure projects such as roads, airports and ports in the year 2014/2015.
The expose by the International Consortium of Investigative Journalists (ICIJ) followed the stealing of HSBC client data by Herve Falciani, a former IT employee of HSBC’s Swiss private bank.
HSBC said Falciani downloaded details of accounts and clients at the end of 2006 and early 2007. French authorities have obtained data on thousands of the customers and shared them with tax authorities elsewhere.
“The maximum amount of money associated with a client connected to Kenya was $35.8million (Sh3.27billion),” the report showed and further revealed that some 742 Kenyans or individuals with Kenya links were operating 1,093 bank accounts with HSBC. The report says that 32 per cent of the clients were either Kenya nationals or carried a Kenyan passport.
Among those named is Machakos Senator Johnstone Muthama who is identified among Kenyans who either have or previously operated accounts with HSBC.
ICIJ says that by releasing the data they do not suggest or imply that any persons, companies or other entities included in the Swiss Leaks interactive application have broken the law or otherwise acted improperly.
On Mr Muthama, HSBC files recorded his name in connection with the client account “ROCKLAND96”, which was set up in 1996 and closed in 2000.
Mr Muthama was also linked to the client account “20443NM” over the same period.
Bank files listed eight of his relatives — named Nduya Muthama — also linked to the numbered account. The leaked files do not specify the exact role that he had in relation to the accounts.
Mr Muthama is quoted admitting to running the said accounts: “This was necessary because my foreign directors/partners were in the process of setting up the mining company; funds were needed. The account was therefore opened to facilitate remittance of funds into one central account for the sole purpose of purchasing mining equipment and spare parts. Once the mine was set up, the account was consequently closed.”
The account Rockland96 was opened in 1996.
The senator is chairman of Muthama Gemstones (Kenya) Ltd that operates internationally dealing in mines and precious stones. He was also founder of the Kenya Gemstone Dealers Association.
60,000 leaked files
The Swiss Leaks is a trove of almost 60,000 leaked files that provide details on over 100,000 HSBC clients and their bank accounts.
The report which was leaked to British media came as British bank HSBC Holdings Plc admitted failings by its Swiss subsidiary in response to media reports that it helped wealthy customers dodge taxes and conceal millions of dollars of assets.
“We acknowledge and are accountable for past compliance and control failures,” HSBC said late on Sunday after news outlets including French newspaper Le Monde and Britain’s The Guardian published allegations about its Swiss private bank.
The Guardian, along with other news outlets, cited documents obtained by the International Consortium of Investigative Journalists (ICIJ) viaLe Monde.
HSBC said that its Swiss arm had not been fully integrated into HSBC after its purchase in 1999, allowing “significantly lower” standards of compliance and due diligence to persist.
The Guardian alleged in its report that the files showed HSBC’s Swiss bank routinely allowed clients to withdraw “bricks” of cash, often in foreign currencies which were of little use in Switzerland.
HSBC also marketed schemes which were likely to enable wealthy clients to avoid European taxes and colluded with some to conceal undeclared accounts from domestic tax authorities, the Guardian added.
The reports triggered political debate in Britain ahead of a parliamentary election in May.
Margaret Hodge, a senior opposition Labour Party lawmaker, said UK tax authorities had done too little.
“All the other countries have collected much more,” she told BBC Radio’s Today program on Monday. “We are never assertive enough, aggressive enough to protect the taxpayer.”
David Gauke, a Conservative lawmaker and a junior minister in the finance ministry, criticised HSBC and said the case lifted the lid on poor banking behaviour at the time.
“Clearly HSBC have got questions to answer. Clearly the behavior that is set out in these disclosures reveal behavior in 2005 to 2007 that is not what we would expect from a major bank,” he said, calling tax evasion “completely unacceptable.”
Falciani could not be reached for comment. He has previously told Reuters he is a whistleblower trying to help governments track down citizens who used Swiss accounts to evade tax.