By Desie Heita
WINDHOEK – At least two companies with direct interest in Namibia’s diamond industry have been cited in the web of investigations against Swiss private bank HSBC, which is under renewed scrutiny from a number of European governments for allegedly allowing rich people across the globe to avoid paying tax.
The names of Lev Leviev Diamonds and Lazare Kaplan International, both with interests in Namibia’s diamond-cutting industry, popped up in documents detailing HSBC’s conduct that attracted global attention this week.
American diamond tycoon Maurice Tempelsman is a sightholder through Lazare Kaplan Diamonds Namibia, which has a stake in Namdeb’s sightholder subsidiary, NamGem.
Lev Leviev, owned by Russian-Israeli tycoon Lev Leviev, owned a diamond-cutting and polishing plant in Namibia, but laid off its entire workforce in 2012 after its bid to buy rough gems from De Beers flopped.
The company’s local subsidiary is now pursuing plans to mine phosphate off the Namibian coast.
Overall, leaked documents revealed that Namibians stashed away more than N$44.9 million in accounts with HSBC Private Bank in Switzerland, with accounts active in the period between 1988 and 2007.
Twenty of the HSBC clients are associated with Namibia while about four either have Namibian passports or nationality, investigators say.
Investigations against HSBC will determine, amongst others, the extent the bank went to assist diamond traders to launder money and avoid paying taxes on money made from African diamonds, oil and other resources.
Even though it is not illegal to open a Swiss account and not all those who open such accounts have duplicitous intent, the leaked documents of HSBC money transactions and official internal correspondence clearly show that the Swiss bank deliberately ignored frequent warning signs among its array of diamond trade clients while actively helping some set up offshore companies to obscure their business dealings.
Last November the Belgian authorities charged HSBC with fraud, money laundering and criminal conspiracy over the bank’s dealings with diamond dealers.
They accused HSBC of “knowingly favouring and encouraging fiscal fraud, giving privileged clients access to offshore accounts, particularly in Panama and the [British] Virgin Islands.” HSBC said at the time that it would “cooperate to the fullest extent possible”.
The leaked documents provide an unprecedented glimpse inside the privileged and taciturn Swiss banking system for the rich, and how the HSBC bank maintained secrete bank accounts in a manner that is potentially illegal or unethical.
The documents were obtained by the International Consortium of Investigative Journalists (ICIJ) via the French newspaper Le Monde. ICIJ’s vast network of journalists from 45 countries pored over the document cache to untangle what has become the most observed case of money laundering and tax evasion in Europe.
In a statement to ICIJ, HSBC wrote, “We acknowledge and are accountable for past compliance and control failures. We have taken significant steps over the past several years to implement reforms and exit clients who did not meet strict new HSBC standards, including those where we had concerns in relation to tax compliance.”
Interestingly, documents show that the HSBC office in the picturesque Geneva street of Rue Dr Alfred Vincent, allowed individuals to withdraw as much as N$200 000 in single cash withdrawals of preferred foreign cash, against international banking laws, and give instructions for the setting up of bogus accounts and holding corporations for money laundering. – Additional reporting by ICIJ