Bloomberg News

HSBC Wins Case Over Employee Names in Money Laundering Suit

October 13, 2011

(Updates with lawyer comment in sixth paragraph.)

Oct. 13 (Bloomberg) -- HSBC Holdings Plc’s U.K. private banking unit won a ruling over whether it had to disclose the identity of employees who reported clients’ suspicious financial transactions to authorities.

A London appeals court said today that a Zimbabwean couple didn’t have the right to discover which HSBC employees reported attempted money transfers from their account to the Serious Organised Crime Agency. The employees, whose names were redacted by the bank during litigation, suspected the money may have been criminal property, according to the judgment.

Jayesh Shah and his wife Shaleetha Mahabeer sued HSBC in 2007 for more than $300 million, claiming that delays in executing four transfers from their account for over $38 million caused the losses. They said they were stigmatized in Zimbabwe and suspected of money laundering because of HSBC, causing authorities there to freeze and seize their assets.

The Zimbabwean police were alerted by a former employee of the couple who didn’t receive a payment, the court said today. The ex-employee told police that Shah was suspected of money laundering in the U.K., leading them to seize his investments.

“The more I listened to the explanation of why the claimants wanted the names, the more convinced I became that, to use the familiar cliche, this was a fishing expedition,” Justice Kim Lewison said. “It is all speculation and surmise.”

A spokeswoman for Shah and Mahabeer’s lawyers at Edwards Wildman Palmer UK LLP declined to immediately comment.

--Editors: Anthony Aarons, Peter Chapman

To contact the reporter on this story: Lindsay Fortado in London at lfortado@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net


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