Coming back to haunt her

If I say the words “HSBC” and “Mexico” in the same sentence, we all know whereof I speak.  (For any newcomers to AML, this is good summary.)  Busy as I am obsessing about all things money laundering, I do not usually worry about whether Scotland is going to flounce off up to its bedroom or who’s going to run the BBC, but when it was announced that the “preferred candidate” to head up the BBC Trust had served on the board of HSBC during what the Mexicans might call il grande fiasco, my little ears pricked up.  Rona Fairhead’s main job between 2006 and 2013 was to be in charge of the Financial Times Group, but she also served as a non-exec director at HSBC and PepsiCo.  Far be it from me to wonder whether she had time to keep her eye on all those balls – after all, with all the financial skulduggery that requires my outrage at the moment, I’m finding it hard to finish that jumper I’ve been knitting since May, so running a newspaper group and serving on two boards would be quite beyond me.

But it seems that I was not the only one to be concerned, and Ms Fairhead was asked to appear before the Culture, Media and Sports Select Committee to answer questions from MPs on 9 September.  I would like to call her answers illuminating, but that would be a fib.  At the time of il grande fiasco (IGF), she was chair of HSBC’s risk committee, which I had always thought would require more than a nodding acquaintance with the concept of, well, risk.  When asked by MP Paul Farrelly whether she felt she had done enough to prevent IGF, Ms Fairhead replied: “One has to be realistic and sometimes bad things do happen.  Sometimes the controls you think are effective turn out not to be so…  In Mexico when an issue was raised we would ask different view points and the data [suggested] everything was fine, the feedback was that we had addressed this.  It turned out not to be so…  There is no silver bullet but a huge amount of work has been done to make sure the culture is that you do the right thing, even if no-one is looking.”  Ms Fairhead has remained at HSBC, where she is now a member of its financial system vulnerabilities committee.

On 10 September Ms Fairhead was confirmed as the new head of the BBC Trust – but her celebrations were presumably quite short-lived, as within hours details were emerging of a class action lawsuit being brought in New York against HSBC by its shareholders, on the grounds that the bank allowed terrorists and Mexican drug cartels to launder their money through its services and accounts.  The shareholders involved want the US courts to force eighty-nine directors, including Ms Fairhead, to repay the fines incurred by HSBC over IGF – fines totalling £1.2 billion.  That’s £13,483,146 per director.  Some of us have been calling for individual responsibility like this – and now that she’s in charge, “Panorama” could make a special programme all about it.

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3 Responses to Coming back to haunt her

  1. Roy McCarthy says:

    Sometimes one is quite happy not to be a high flyer. I could repay £13.48 maybe…

  2. Tee hee! Of course, now you’re a hostage to fortune – if you ever stray from the path of righteousness, we know you’re good for £13.48.
    Best wishes from Susan

  3. Pingback: One in ten | I hate money laundering

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