|Richard Caring, owner of the the Ivy restaurant. Photograph: Rex Features|
HSBC files reveal mystery of Richard Caring and the £2m cash withdrawal
Leaked data on restaurant tycoon owner of the Ivy show how Swiss arm was willing to hand over huge cash sums to ‘extremely valued’ customers
David Leigh, James Ball, Juliette Garside and David Pegg
Monday 9 February 2015 06.31 GMT
Accompanied by a hired bodyguard, Richard Caring, British clothing tycoon and restaurateur, stepped out of his Geneva bank on a warm September day in 2005 with 5m Swiss francs in cash – the equivalent of £2.25m ($3.4m) – enough to fill a suitcase.
It was a transaction concealed, or so HSBC’s bankers believed at the time, behind an impenetrable wall of Swiss secrecy. This mysterious event is now revealed in the leaked HSBC files and it demonstrates the way the bankers were willing at the time to hand over very large cash sums to their offshore customers.
Richard Brooks, an ex-tax inspector and author of The Great Tax Robbery, told the Guardian: “Banks are supposed to fill in suspicious activity reports for such transactions.” He added: “In the UK I don’t think you would be allowed to withdraw that kind of cash.”
LHSBC, which now admits past wrongdoing and lax controls at its Swiss banking arm, says it has since reformed such cash payments, making it possible to refuse them, and bringing in new “strict controls on withdrawals over [£6,600]”.
The Ivy restaurant. Richard Caring used his access to offshore funds in 2005 to splash out
on the purchase of a string of restaurants and clubs, including this favourite celebrity
haunt. Photograph: Alex Segre/Rex Features
The Guardian asked Caring, owner of the Ivy restaurant in London, who in Switzerland was to receive this untraceable cash consignment, and why. He would not explain. His lawyers said: “It is a private matter in which there was no impropriety on our client’s part.”
The bank did not record on Caring’s file who in Switzerland was to receive the cash. It recorded only that Caring said he planned to deposit it in “a new a/c with a separate institution in Geneva … He did not feel it appropriate for either bank to be aware of the relationship with the other”.
In internal memos, HSBC displayed concern about handing over the banknotes, but sought to justify its behaviour by recording: “RC goes to great lengths to maintain discretion.”
Caring had recently, in July 2005, made clear that if he was crossed by the bank, he was prepared to take away his lucrative business. HSBC had previously objected to a currency shortfall on an account. There was “a lengthy and challenging conversation” as a result, the bank noted. “It would be possible for him to send funds from Monaco at a moment’s notice, should we insist. However, they would be accompanied by instructions to close the account. He expects us to consider his global relationship.” The bank was anxious, as it put it, “to bring this relationship back on track and to try to repair some of the damage”. It believed Caring was worth up to £500m ($762m) worldwide.
Some weeks later, on Monday 5 September, he summoned an HSBC banker to his London office near Euston station, and demanded that he authorise the £2.25m payment, to be handed over to him in Swiss francs, in Switzerland.
St Petersburg in 2005. Photograph: Rex Features
“He is extremely valued,” the Swiss bankers wrote. But they at first demurred: “RC is fully aware that his request is exceptional, particularly in view of the amount involved. He stressed, however, that he has an extensive relationship with the Group … and that all his dealings have been conducted entirely correctly over the years.”
HSBC added: “He stressed … due to his non-UK domicile status … he holds funds outside of the UK entirely legitimately.”
Caring is a UK-born citizen, who lives in London in a mansion known as the “Versailles of Hampstead”. But he claimed hereditary “non-domiciled” tax status thanks to the US origins of his father, a former GI who settled in London after the war. This quirk enabled Caring not to disclose the existence of his Swiss or Monaco accounts to the UK tax authorities, and legally to avoid taxes on his capital held there.
The bank made a point of noting that Sir John Bond, the main bank group chairman and other top executives, were personal acquaintances of Caring. (There is no suggestion Bond was aware of the cash transaction.) The head of the Swiss bank himself, Peter Braunwalder, eventually gave the go-ahead with “our exceptional agreement to this request”.
Caring’s lawyers told the Guardian there were “internal administrative procedures … to check the legitimacy of the transaction and avoid money-laundering”. The bank had been satisfied with his explanation, they said.
According to the bank’s files, the funds for the cash handover originated from accounts in the tax haven of Monaco secretly controlled by Caring, but held under the name of Tina Green, wife of the Topshop billionaire Sir Philip Green. Caring was one of his major suppliers, and a close personal friend.
The bank recorded: “As we know, until now [Caring] has hesitated from holding the vast majority of his cash assets in his own name, preferring to accept the offer of Mrs Green that she holds them in trust on his behalf.”
Richard Caring’s mansion in London, known as ‘Versailles of Hampstead’.
There is no suggestion either of the Greens knew about the consignment of cash, or broke any laws.
The bank noted that Caring’s offshore accounts, containing more than £100m ($152m), were, among other things, husbanding profits from an “anonymous” 22% holding in BHS, part of Green’s fashion empire. Neither Caring nor Green will say why the BHS investment was concealed in this way. Caring insists that he himself has always paid all due taxes on time, including £33m ($50m) UK tax on dividends he received from BHS.
Green, a supporter of David Cameron and a government adviser on “efficiency”, has come under fire from tax campaigners. A huge £1.17bn ($1.78bn) dividend from his companies was paid at this time, apparently minimising tax, to his wife in Monaco, who is registered as their main beneficial owner.
Caring, currently a £413,000 ($629,000) donor to the Conservatives and previously a lender of £2m to Labour, used his access to offshore funds in 2005 to splash out on the purchase of a string of restaurants and clubs, including London’s favourite celebrity haunt the Ivy, Belgo, Soho House and Wentworth golf course. He made showy charitable gestures, including a charity ball in a palace in St Petersburg. He handed over $1m (£650,000) for Bill Clinton to attend in fancy dress, paid to the former US president’s foundation.
HSBC said it was not allowed by Swiss bank secrecy laws to discuss individuals. In a statement it said the Swiss bank’s past “compliance culture and standards of due diligence … were significantly lower than they are today”.
HSBC said it had since introduced a tax transparency initiative under which “amended terms and conditions allowed the private bank to refuse a cash withdrawal request, and placed strict controls on withdrawals over US$10,000”.