The British bank Standard Chartered has rejected a US regulator's claim that it hid $250bn in transactions with Iranian banks in violation of US sanctions.
The denial came on Tuesday, a day after New York's Department of Financial Services (DFS) threatened to revoke the bank's licence and impose fines, as the regulator branded the London-based lender as a "rogue bank".
"The group strongly rejects the position or the portrayal of facts as set out in the order issued by the DFS," group company secretary Annemarie Durbin said in a statement.
"The group does not believe the order issued by the DFS presents a full and accurate picture of the facts."
Shares of Standard Chartered fell by as much as a quarter in trading in London and 7.5 per cent on the Hong Kong stock exchange, as there are fears the bank could lose its operating license in the USA.
The US regulator accused the bank of systematically disguising foreign exchange deals with Iran in a breach of controls that potentially opened up the US banking system to terrorists and criminals.
The regulator said that Standard Chartered had hidden 60,000 such secret transactions from 2001 to 2010.
|Facts and figures: Standard Chartered|
- Standard Chartered is based in London.
- Originally opened in Bombay, Calcutta and Shanghai, the Chartered Bank was given a Royal Charter in 1858.
- Standard Chartered Bank was formed in 1969 through the merger of Standard Bank of British South Africa and the Chartered Bank of India, Australia and China.
- It has 1,700 offices in 70 locations.
- The bank made a pre-tax profit of $6.8bn in 2011.
It has ordered the bank to explain the alleged violations by August 15, in the latest US move against foreign lenders accused of failing to prevent money laundering and other illicit transactions.
The regulator also said that it would hold a formal hearing over the "assessment of monetary penalties". The bank has also been threatened with having its US banking licence revoked.
'Reviewing the claims'
The bank, which mainly focuses on emerging markets in Asia, the Middle East and Africa, said it was surprised at the allegations as it had informed relevant US agencies in 2010 that it had voluntarily launched an internal compliance review.
Senior management were said to have codified their illegal procedures in formal operating manuals, including one labelled "Quality Operating Procedure Iranian Bank Processing".
The bank was also accused of falsifying Swift wire payment directions by stripping the message of unwanted data that showed the clients were Iranian, replacing it with false entries.
Standard Chartered said the review "did not identify a single payment on behalf of any party that was designated at the time by the US government as a terrorist entity or organisation".
The bank says it stopped all new business with Iranian customers more than five years ago.
The sums mentioned in the Standard Chartered controversy are far larger than those involving HSBC, which was recently accused by the US Senate of failing to prevent money laundering from countries around the world including Mexico and Iran.
Standard Chartered last week posted record first-half net profit of $2.81bn, up 12 per cent from the previous corresponding period.
In a statement accompanying the results, chief executive Peter Sands lauded the bank's "culture and values" as a source of strength over its competitors.
"We are selective and turn things down that we don't understand, or don't like the look of," said Sands.
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|Liaquat Ali Khan|