BBC Trust chair urged to resign


Published: Monday 9th March 2015 by The News Editor

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The head of an influential committee of MPs has called for the chair of the BBC Trust to resign or be sacked from her role overseeing the corporation over her role as an independent director at scandal-hit bank HSBC.

Margaret Hodge, chair of the Public Accounts Committee, said that Rona Fairhead, who chaired the audit committee of the bank, had been “either incredibly naive or totally incompetent”.

Ms Hodge said: “I don’t think that the record that you have shown of your performance here as the guardian of HSBC gives me the confidence that you should be the guardian of the BBC licence fee payers’ money.

“You should think about resigning. If not, the Government should sack you.”

Ms Fairhead was being grilled by MPs on the committee over her oversight of the bank, which has come under fire over claims that its Swiss private banking arm helped clients avoid millions of pounds in tax.

The same hearing also saw the bank’s chief executive Stuart Gulliver forced to defend his own position while Chris Meares, former group head of private banking, was accused of being an “unreliable witness”.

Ms Fairhead “categorically” denied knowing about the Swiss tax scandal at the time and said that she had been “unyielding” in acting against wrongdoing.

She said: “I think that first and foremost the people who are most culpable are those people who evade taxes.”

Ms Fairhead also pointed the finger of blame at “frontline” staff for breaching the policies of the bank.

She added: “We were horrified when we discovered. I can assure you absolutely no evidence of tax evasion was received. I could only respond to evidence that I had and I could only deal with that.”

But Ms Hodge said for a highly-paid non-executive to “simply take the evidence and not question, to me would mean she is not fit for purpose”.

Ms Fairhead described as untrue reports that she is paid £10,000 a day by the bank.

HSBC’s annual report showed she received £513,000 in fees and benefits last year including a £334,000 fee as non-executive chairman of HSBC North America Holdings.

One MP, Austin Mitchell, said her pay seemed like “money for jam”.

Ms Fairhead said she worked 75 to 100 days a year including weekends for the bank, plus 150 to 180 days for the BBC, as well as 25 days in a separate role for Pepsi.

The hearing also saw Mr Gulliver insist he was the right person to lead the bank after being questioned over his own tax affairs.

He was grilled by MPs after it emerged he had funnelled 7.5 million US dollars (£5 million) of his own money into a bank account set up by a company in Panama.

Mr Gulliver said he was now paid and taxed in the UK and the details of the payment came from 17 years ago when he was based in Hong Kong.

He admitted “innuendo” surrounding his affairs may have caused damage to HSBC’s reputation but insisted he was still the appropriate person to lead the bank.

“I believe I am because my tax affairs are in order and I have carried out root and branch reforms to HSBC in the five years I have been chief executive.”

Mr Gulliver and chairman Douglas Flint have previously apologised in a separate hearing before MPs for “unacceptable” activities at HSBC’s private Swiss bank.

Pressed further on his own tax affairs today, Mr Gulliver said: “I can see how you might see some inconsistency, but I think you are being a bit harsh.

“There was no tax evasion, no avoidance. It was simply done for privacy reasons. I have paid millions of pounds of tax at the top rate.”

Mr Meares, who ran HSBC’s private banking arm from 2006 to 2011, came in for severe criticism.

He said Switzerland had represented 30% of the private bank, adding: “I didn’t spend my whole time in Switzerland. I probably spent about 20% of my time. I was not personally accountable for the actions of individuals in Switzerland.”

Mr Meares said he was responsible for “control failings” that may have happened under his auspices but said none of what had happened was “flagged to me sitting in London” and he was unaware of clients being handed out large sums of cash.

Committee chair Margaret Hodge, citing details from the leaked documents that uncovered the scandal including visits to advise clients in London at the Ritz and at their homes, told Mr Meares: “I don’t believe you didn’t know.”

He said: “I didn’t know. It was all activity in the Swiss systems.”

Mr Meares added: “I have worked for HSBC for 30 years. I have never had my honesty doubted, or my integrity.”

However, another MP, Stephen Hammond, said: “In legal terms, you are a wholly unreliable witness.”

Published: Monday 9th March 2015 by The News Editor

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