The Right Honourable Lord Hain of Neath

House of Lords, London SW1A 0PW

Email: peter.hain@parliamant.uk Tel: 020 7219 3925

7 March 2018

Ms Lynne Owens CBE QPM MA

Director General
National Crimes Agency
Units 1 - 6 Citadel Place,
Tinworth Street,
London
SE11 5EF

Dear Lynne Owens

Complicity in serious wrong-doing by HSBC Holdings and HSBC in South Africa
against a vulnerable charity, Education Africa

Following on my letter dated 25th September 2017 to the Right Honourable Philip
Hammond, regarding the Zuma, Gupta, Standard Chartered and HSBC matter, I am
aware that your Agency is already in the process of investigating HSBC regarding
wrongdoing at Education Africa, a South African charity that focuses on the
education of impoverished youth.
I now write with further information supplied to me asking that you take this into
account.
Published recently in the South African press was a report that a dubious payment of
R400 million was made by Eskom, the country’s state owned electricity utility, to
HSBC, which is now being scrutinised. This raises further serious concerns that
require investigation concerning what seems to be further dubious business dealings
of HSBC in South Africa.

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HSBC was a Trustee of Education Africa. Its first representative on the Board of this
charity being Mr Krishna Patel, the then Group General Manager and CEO of HSBC
Africa. Mr Patel and his colleagues were involved in a string of wrongdoings against
Education Africa, including likely criminal wrongdoings but this has not been
addressed by HSBC Holdings Plc., to no doubt to protect their colleagues. This
emerged through an investigation conducted by Werksmans, a pre-eminent law firm
in South Africa. The investigation report was provided to HSBC Holdings Plc.
The forensic investigation undertaken by Werksmans in particular considered the
actions by HSBC as a Trustee of Education Africa, represented by a number of its
senior staff. What the forensics found was that there had been a number of incidents
of dishonesty and corporate bullying and manipulation by HSBC, inter alia:
In 2010/11, HSBC seconded at least 7 employees to perform various tasks at the
Non-profit Company (Charity), being Education Africa, through whom the criminal
activities were conducted.
1. Correia purported to act as the Company Secretary of the Company without
being duly authorised to so act by the trustees. She then proceeded to take
minutes of meetings and to certify minutes. It then transpired that Correia took
the minute book of the Company off the Company’s premises. This conduct
amounts to an offence in terms of sections 204 and 206(2) of the previous
Companies Act, No. 61 of 1973, (the “Old Companies Act”) and sections 24 and
25 of the new Companies Act, No. 71 of 2008, (the “New Companies Act”).
Alternatively, this conduct amounts to theft of the Company’s property.
2. Moodley attempted to become a signatory on the Company’s bank account
which was not approved by HSBC. Thereafter, Moodley manually gained access
to the Company’s bank account which, was fraudulent.
3. The deletion of profiles, correspondence and financial information from the
Company’s computer system amounts to a contravention of the Electronic
Communications and Transactions Act, No. 25 of 2002. Alternatively, this
amounts to theft of the Company’s property and information.
4. The actions by the then trustees of the Company informing donors and other
stakeholders of alleged gaps identified in the Company’s governance systems
and procedures amounts to reckless trading as contemplated in section 424 of
the Old Companies Act.
5. The amounts withdrawn from donor projects were not authorised and were
not utilised for the purpose for which they were donated. Furthermore, these
amounts were not reimbursed to the Company following the resignation of the
then trustees, this amounts to theft.

After the forensic investigation was undertaken by Werksmans Attorney’s regarding

the wrongdoing, a feedback session was held, where Mr Andy Henderson, the then
UK Trade Commissioner to South Africa, was present. Mr Henderson thereafter
brought the matter to the attention of Mr Ralph Barber, at that time the Company
Secretary of HSBC Holdings Plc. Nothing appeared to have been done and all
indications are that the matter was swept under the carpet. Only after Education
Africa’s attorney brought the matter to the attention of Mr Gulliver, the Chief
Executive of HSBC Holdings, did HSBC Holdings agree to settle the matter. While
the resultant settlement of the matter may have been unethically unfairly, it does not
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absolve HSBC Holdings Plc. nor HSBC in South Africa for any of its criminal acts nor
does it absolve them of the moral and ethical standard that ought to be adopted by
our banking institutions. By HSBC Holdings and not HSBC in South Africa taking on
financial responsibility for the matter and with the settlement being negotiated and
settled by HSBC Holdings, HSBC Holdings resigning as a Trustee of Education
Africa, which had in hand the facts of the forensic investigation and a list of further
wrongdoing (which was given to Mr Gulliver) it is quite apparent that HSBC Holdings
have become complicit in this manipulation and abuse of a charitable institution.
While HSBC Holdings did not sanction in advance the actions of its branch in South
Africa that had taken part directly and/or indirectly in this criminal, or at the very least
morally corrupt actions the fact remains that it is complicit in wrongdoing and has not
taken full and appropriate action to ensure that this type of reprehensible behaviour
does not occur again in the future. At the very least it would have been expected that
it would have insisted upon the dismissal of the HSBC South Africa personnel
involved in this matter and sanctioned those that covered up the matter at HSBC
Holdings Plc., which was not the case.

From 2012/13 the following people at HSBC Holdings have full knowledge of this
matter
 Stuart Gulliver | Chief Executive
 Ralph Barber | Company Secretary
 Simon Martin |Head of Group Corporate Sustainability
 Guy Nielson | Global Co-General Counsel Litigation and Regulatory
Enforcement
And more recently
 Mark Tucker |Group Chairman
 Stuart Levey | Chief Legal Officer

In 2011 the following people at HSBC Africa were highlighted in the wrongdoing
 Krishna Patel | Group General Manager and CEO
 Claudine Moodley | Treasury Accountant
 Isabel Correia | Company Secretary & Head of Marketing
 Henk Crouse | Head of Legal & Compliance
 Willem Kruger | HR Manager
 Cornelius Oosthuizen | Managing Director, Information Technology and
Services | IT Support
 Nadine Geyer

What makes matters worse is that HSBC Holdings has been given every opportunity
to put things right, but has rather chosen not to compensate Education Africa fairly
and did not make a public apology to enable the charity to get back on its feet. It took
no steps to approach the donors as would have been appropriate to reassure them
of the good management of the charity and its need for support to further a just
cause. The charity was compelled to enter into a poor settlement by HSBC Holdings
and refused to compensate our unsung heroes who have dedicated themselves to
the service of Education Africa and who have committed their lives to helping
disadvantaged South Africans gain access to educational opportunities. Many of the
staff at Education have had their lives torn apart; many have lost their jobs, lost their
job security, lost their financial wellbeing, their health been negatively impacted and
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in one case a person even lost their home through the actions which are attributable
to the shenanigans of HSBC. On the other hand, those involved at HSBC Holdings
not taking action and in particular HSBC Africa have remained secure in their jobs,
drawing big salaries, bonuses and pensions.

Below I mention some of Education Africa’s ‘unsung heroes’ being those who have
personal stories to tell as to how they have suffered as a consequence of the actions
of HSBC, Stuart Gulliver and those that manipulated the charitable institution,
Education Africa:

 James Urdang, CEO & Founder of Education Africa

 Bongekile Mathebula
 Wageng Monageng
 Mthetheleli Mtambo

Below are some of the documented systematic intimidation metered out by HSBC to
the vulnerable staff at Education Africa

 Seconding senior HSBC staff to interrogate the Education Africa staff

 Changing the charity’s office door locks and controlling access for several
weeks
 Driving the unethical suspension of senior Education Africa staff with no
charges having been proffered and when charges were finally brought they
collapsed as they had no substance
 HSBC as a Trustee was then involved in a defamation campaign against
James Urdang accusing him of financial mismanagement and ill-treatment of
children, which the forensic investigation found had no substance.
 Instructing a staff member, under threat of repercussions if it was not done,
to send email letters to donors of Education Africa which amounted to the
spreading of untruths and accordingly making Education Africa implicit in
reckless trading
 Sending 8 senior HSBC staff into the Education Africa offices the day before
they departed to be seen no more and who, by their very presence and by
their conduct, intimidated the staff of Education Africa even more.
When Werksmans attorney’s responded during the forensic report back to the
question “why did HSBC go so far” in reference to the derogatory statements made
about the senior staff, the view was expressed that when HSBC could not force the
charity out of business to cover up their wrongdoings, so they went one step further
and tried to destroy James Urdang’s life to cover up what they had done, which it
was surmised would have resulted in a domino effect on his colleagues and which
could in that way implode the charity.
Mr Stuart Gulliver professes that the bank ‘takes good governance extremely
seriously’, and has gone on record as follows:-
Bloomberg’s 15/02/15 quote: HSBC Holdings Plc. CEO Stuart Gulliver offered
“sincerest apologies” following fresh details of how the bank’s Swiss unit helped
customers evade taxes. The revelations were a ”painful experience” for the bank,
Gulliver 55 wrote. . . . . . . . . “We have absolutely no appetite to do business with
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clients who are evading their taxes or who fail to meet our financial crime compliance
standards.”
London, Feb 25, 2015(AFP) quote: CEO Stuart Gulliver and Chairman Douglas
Flint issued the new apology in appearance before parliament’s influential Treasury
Select Committee. “I’d like to put on record an apology from both myself and from
Douglas for the unacceptable events that took place,’ Gulliver told the committee. “It
is clearly was unacceptable,” he said.
He added that he was apologising “for lack of controls and the practices which with
the benefit of hindsight we would not be at all comfortable with if they were
happening today and which have clearly resulted in damage to trust and confidence
in HSBC.”
Although Mr Gulliver and a number of his senior colleagues profess that appropriate
controls and practices should be in place, they have not changed their ways, even
after appearing in front Parliament’s Treasury Select Committee and making a public
apology regarding the banks’ governance.
The National Crimes Agency need to fully investigate this matter and to work with
your South African counterparts to bring these individuals and the banking entity to
account so as to take full responsibility for their actions. In addition it would be
appropriate for the National Crimes Agency to investigate:

 If Mr Gulliver has misled Parliament as per his statements to Parliaments’

Treasury Select Committee
 Whether HSBC Holdings, Mr Gulliver and/or employees and/or officials or
officers of HSBC Holdings participated in or were associated with covering up
crimes
 Why HSBC Holdings, Mr Gulliver and its senior staff have not taken action
against those involved in this horrendous crime and cover-up.
 Stuart Gulliver and his senior staff in bringing HSBC governance both locally
and internationally into disrepute
 Mr Patel who subsequently got promoted to head up HSBC Private Banking in
Switzerland and after a short period at the helm parted ways with HSBC. The
reason for his sudden departure from the Bank needs to be investigated as it
is clearly suspicious!

We are trying to deal with corporate and white-collar crime globally and I am
persisting in my quest to expose and bring people to account/justice including in
respect of those who tear South Africa apart. What HSBC has now done to a
vulnerable charity and to those who have given up so much to make our world a
better place, is extremely distressing and shocking. This conduct by HSBC, and I am
sure I can also speak for millions of British people, people around the world, HSBC
shareholders, HSBC depositors, and say “HSBC not in our name”.
This is now a public interest matter and HSBC Holdings and its shareholders must
reassure the public that they will now take moral responsibility to make sure that
Education Africa will never fail due to their actions. They must also take responsibility

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to redress the wrongs that HSBC have inflicted upon the individuals who submitted
personal claims against the Bank but which HSBC has rejected.
I would be grateful if you could keep me updated on your decisions and actions in
regards to this matter. Please could you also share with the Financial Conduct
Authority the status of your investigation?
Yours sincerely