First it was KPMG, then McKinsey and now its HSBC and Standard Chartered. Where will the Gupta scandal head to next?
HSBC Holdings PLC and Standard Chartered PLC have been asked by the U.K. financial regulator to review possible business with South Africa’s Gupta family, becoming the latest firms to be hit by the fallout from a corruption scandal in Africa’s most developed economy.
An investigation by the Financial Conduct Authority (FCA), comes after Peter Hain, a former Labour cabinet minister, wrote to the Chancellor, raising concerns about the London banks’ potential exposure.
According to the Financial Times, Mr Hain said allegedly illicit funds may have passed through the banks’ operations in the Middle East and Hong Kong, where HSBC and Standard Chartered have large footprints.
This is the latest chapter in the South African scandal engulfing President Jacob Zuma and the billionaire Gupta family which is spreading deeper into the global professional services sector. This follows on from last Friday when eight senior executives were dismissed from KPMG’s division in the country. The biggest political scandal to face South Africa since the apartheid era has already triggered the collapse of British PR firm Bell Pottinger and forced McKinsey, the consultancy firm, to launch an investigation into its work in the country. Public outrage about the Guptas’ role in South African politics intensified in June when leaked emails fuelled fears the family was exploiting its friendship with Mr Zuma to win state contracts and manipulate political appointments.