UBS goes on trial in France over alleged tax fraud

UBS’s trial in France follows a similar judicial process in the US where the bank accepted in 2009 to pay $780 million in a settlement. (AFP)
Updated 08 October 2018
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UBS goes on trial in France over alleged tax fraud

  • The largest Swiss bank risks fines of up to €5 billion
  • The bank intends to stand its ground in court

PARIS: Swiss bank UBS Group , its French unit and six top executives go on trial on Monday after a long-running investigation into allegations they helped wealthy clients avoid taxes in France.
After years of investigation and aborted settlement negotiations, UBS faces charges of aggravated tax fraud and money laundering as well as illegally soliciting clients in France.
The largest Swiss bank risks fines of up to €5 billion ($5.76 billion).
The bank intends to stand its ground in court. “After more than six years of legal proceedings, we will finally have the opportunity to respond to the often-unfounded allegations,” it said on Friday.
Banks became more rigorous after the 2008 financial crisis, a series of financial scandals at some of the world’s biggest banks and the imposition of tighter regulations, analysts say.
UBS’s trial in France follows a similar judicial process in the United States where the bank accepted in 2009 to pay $780 million in a settlement. In Germany, UBS agreed to a 300 million euro fine in 2014.
During the French investigation, UBS turned down a settlement offer of €1.1 billion made by the authorities. The amount corresponded to what the Swiss bank had already paid as a court bond, according to judicial sources.
Most of the trial’s first week will be spent on dealing with technicalities likely to be brought up by the defendants’ lawyers.
The investigation into UBS in the US began after UBS employee Bradley Birkenfeld revealed a scheme to funnel wealthy customers’ cash from the United States to Switzerland bypassing the US taxman.
Birkenfeld spoke separately to French investigators. Even though he is not due to testify in court in Paris he will attend the hearings.
The whistleblower told Reuters that he hoped for a stiff penalty for the Swiss bank. “If they set an example with UBS, most other banks will be scared,” he said.
For money laundering, French criminal law lets judges enforce fines as high as half of the amount laundered. In the French case, prosecutors estimate that up to €10.6 billion was denied to the taxman.


‘Don’t be too optimistic’: Huawei employees fret at US ban

Updated 26 May 2019
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‘Don’t be too optimistic’: Huawei employees fret at US ban

  • This week Google, whose Android operating system powers most of the world’s smartphones, said it would cut ties with Huawei
  • Another critical partner, ARM Holdings, said it was complying with the US restrictions

BEIJING: While Huawei’s founder brushes aside a US ban against his company, the telecom giant’s employees have been less sanguine, confessing fears for their future in online chat rooms.
Huawei CEO Ren Zhengfei declared this week the company has a hoard of microchips and the ability to make its own in order to withstand a potentially crippling US ban on using American components and software in its products.
“If you really want to know what’s going on with us, you can visit our Xinsheng Community,” Ren told Chinese media, alluding to Huawei’s internal forum partially open to viewers outside the company.
But a peek into Xinsheng shows his words have not reassured everyone within the Shenzhen-based company.
“During difficult times, what should we do as individuals?” posted an employee under the handle Xiao Feng on Thursday.
“At home reduce your debts and maintain enough cash,” Xiao Feng wrote.
“Make a plan for your financial assets and don’t be overly optimistic about your remuneration and income.”
This week Google, whose Android operating system powers most of the world’s smartphones, said it would cut ties with Huawei as a result of the ban.
Another critical partner, ARM Holdings — a British designer of semiconductors owned by Japanese group Softbank — said it was complying with the US restrictions.
“On its own Huawei can’t resolve this problem, we need to seek support from government policy,” one unnamed employee wrote last week, in a post that received dozens of likes and replies.
The employee outlined a plan for China to block off its smartphone market from all American components much in the same way Beijing fostered its Internet tech giants behind a “Great Firewall” that keeps out Google, Facebook, Twitter and dozens of other foreign companies.
“Our domestic market is big enough, we can use this opportunity to build up domestic suppliers and our ecosystem,” the employee wrote.
For his part, Ren advocated the opposite response in his interview with Chinese media.
“We should not promote populism; populism is detrimental to the country,” he said, noting that his family uses Apple products.
Other employees strategized ways to circumvent the US ban.
One advocated turning to Alibaba’s e-commerce platform Taobao to buy the needed components. Another dangled the prospect of setting up dozens of new companies to make purchases from US suppliers.
Many denounced the US and proposed China ban McDonald’s, Coca-Cola and all-American movies and TV shows.
“First time posting under my real name: we must do our jobs well, advance and retreat with our company,” said an employee named Xu Jin.
The tech ban caps months of US effort to isolate Huawei, whose equipment Washington fears could be used as a Trojan horse by Chinese intelligence services.
Still, last week Trump indicated he was willing to include a fix for Huawei in a trade deal that the two economic giants have struggled to seal and US officials issued a 90-day reprieve on the ban.
In Xinsheng, an employee with the handle Youxin lamented: “I want to advance and retreat alongside the company, but then my boss told me to pack up and go,” followed by two sad-face emoticons.