Swiss Leaks HSBC part of the scam

Secret documents reveal that global banking giant HSBC profited from doing business with arms dealers who channeled mortar bombs to child soldiers in Africa, bag men for Third World dictators, traffickers in blood diamonds and other international outlaws.

The leaked files, based on the inner workings of HSBC’s Swiss private banking arm, relate to accounts holding more than $100 billion. They provide a rare glimpse inside the super-secret Swiss banking system — one the public has never seen before.

The documents, obtained by the International Consortium of Investigative Journalists (ICIJ) via the French newspaper Le Monde, show the bank’s dealings with clients engaged in a spectrum of illegal behavior, especially in hiding hundreds of millions of dollars from tax authorities. They also show private records of famed soccer and tennis players, cyclists, rock stars, Hollywood actors, royalty, politicians, corporate executives and old-wealth families.

These disclosures shine a light on the intersection of international crime and legitimate business, and they dramatically expand what’s known about potentially illegal or unethical behavior in recent years at HSBC, one of the world’s largest banks.

How the offshore banking industry shelters money and hides secrets has enormous implications for societies across the globe. Academics conservatively estimate that $7.6 trillion is held in overseas tax havens, costing government treasuries at least $200 billion a year.

In many instances the records do describe questionable behavior, such as bankers advising clients on how to take a range of measures to avoid paying taxes in their home countries — and customers telling bankers that their accounts are not declared to their governments.

Highlights from ICIJ's investigation:

The reporters found the names of current and former politicians from Britain, Russia, Ukraine, Georgia, Kenya, Romania, India, Liechtenstein, Mexico, Tunisia, the Democratic Republic of the Congo, Zimbabwe, Rwanda, Paraguay, Djibouti, Senegal, the Philippines and Algeria, among others. They found several people on the current U.S. sanctions list, such as Selim Alguadis, a Turkish businessman alleged to have supplied sophisticated electrical goods to Libya’s secret nuclear weapons project, and Gennady Timchenko, a billionaire associate of Russian President Vladimir Putin and one of the main targets of sanctions imposed on Russian individuals and businesses in response to the annexation of Crimea and the crisis in eastern Ukraine.

The files reflect a spectrum of royalty, from King Mohammed VI of Morocco to the Crown prince of Bahrain, Prince Salman bin Hamad bin Isa Al Khalifa, to Prince and Princess Michael of Kent, the beloved cousin of Queen Elizabeth II of England, to dozens of members of Saudi Arabia's ruling family. Many were partial or full beneficial owners of accounts. The role of the King of Morocco was not specified.

Business figures and political donors from the U.S. include the billionaire owner of the Victoria’s Secret lingerie chain, Les Wexner, who in 2012 donated $250,000 to a super PAC supporting former Republican presidential candidate Mitt Romney; the Israeli diamond-dealing Steinmetz family, and the financier and philanthropist S. Donald Sussman, whose account predated his marriage to Democratic Congresswoman Chellie Pingree of Maine.

A representative for Sussman said the account was not his, adding that he had made a passive investment in a technology venture fund. The representative said it was this fund that had the account, the existence of which he learned for the first time when questioned by ICIJ. “Mr. Sussman’s investments were minority interests,” the spokesman said, “and he had no involvement in the funds’ management, investment decisions, or other activities.” 

An analysis of the files by ICIJ shows that many individuals linked to accounts took extra precautions to protect their identities, even though HSBC staff repeatedly assured customers they were already bound by tight Swiss banking secrecy.

Clinton Foundation Donors

The files show Richard Caring, a major donor to British politics, transferring $1 million to the Clinton Foundation, a nonprofit set up by the former U.S. President Bill Clinton with the stated mission to “strengthen the capacity of people in the United States and throughout the world to meet the challenges of global interdependence.”

The donation to the Clinton Foundation was requested in December 2005. The previous month, Caring funded a champagne and caviar extravaganza at Catherine the Great’s Winter Palace in St Petersburg, Russia, flying in 450 guests to be entertained by Sir Elton John and Tina Turner and addressed by Bill Clinton. The event raised more than £11 million for a children’s charity.

A number of other prominent donors to the Clinton Foundation appear in the files, including the Canadian businessman Frank Giustra and German motor racing superstar Michael Schumacher, a seven-time Formula One champion. A representative of Schumacher, who is listed as a beneficial owner of an account closed in 2002, told ICIJ that he is a long-term resident of Switzerland.

A spokesman for the Clinton Foundation told The Guardian it “has strong donor integrity and transparency practices that go well beyond what is required of U.S. charities, including the full disclosure of all of our donors."

Links to Al Qaeda?

HSBC’s clients’ links to Al Qaeda were first publicly raised in the July 2012 U.S. Senate report, which cited an alleged internal Al Qaeda list of financial benefactors. The Senate report said the list came to light after a search of the Bosnian offices of the Benevolence International Foundation, a Saudi-based nonprofit organization that the U.S. Treasury Department has designated as a terrorist organization.

Osama bin Laden, the mastermind behind the 9/11 attacks, referred to the handwritten list of the 20 names as the “Golden Chain.”

From the moment the names on the Golden Chain list were made public in news reports in the spring of 2003, the Senate subcommittee stated that HSBC should have been “on notice” and aware these powerful business figures were high risk clients.

Though the significance of the Golden Chain list has since been questioned, the ICIJ found what appear to be three Golden Chain names with HSBC Swiss accounts that existed after that date.

Courtesy of Public Integrity and www. ICIJ.org

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Effective Use of Social Media in Marketing And Client Service

We have a huge development in the use of social media in Kenya. Young and old have embraced the use of social media to communicate with their loved and catch up on news. For those using social media, we get more news feed from social networks than even from news broadcasters.

Recently I went to drink up organised by Heineken heineken for their suppliers. Personally I use this kind of events for the purposes of networking and there was bit of exchange of business cards. Out of ten people I gave my business cards to four actually asked for my twitter handle. Of the seven business cards I received five had their twitter handle on them. According to one of the attendees I had a chat with; she actually told me that people are more likely to interact with you through your twitter than give you a phone call.

So what can social media contribute to the modern corporate?

The most common use of social media is marketing. We will use twitter for illustrations.

Most companies nowadays engage the service of twitter users who have a large number of followers (we call them big wigs in Kenya). Most people check their social networks frequently and its highly likely that your message will get to them. Some companies pay twips (a twitter user) with large numbers to frequently post about their products and in return get paid for such services.

Safaricom and company are have been able to build big networks have the benefits of marketing and launching of new products since the followers are already customers or potential customers interested in their services.

Unfortunately, it’s a policy of some companies to engage themselves through social media.

A while back, the social media guru and blogger Robert Alai took it upon himself to scone companies through his social media following of over 150, 000 followers. That’s a very large number of people to expose yourself to, especially if it’s a negative exposure. Recently, an agitated customer took to social media thrashing my employer and luckily someone picked it up and looped a staff through her personal Facebook page.

Such companies have been caught napping and most recently my employer decided to start using the social media channel for communication.

So what’s there for insurance companies?

Any company that strives to be successful must harness all the channels of communications. Social media can be a great tool for insurance companies in several reasons.  Companies will be able to pick up queries and respond to them as and when the same occurs. Most tech savvy clients nowadays have resorted to social media to channel their queries as it’s a cheaper means and efficient one. It does not make sense for one to travel physically to the offices to have the same sorted.  A popular example will be for customers who wish to know their current policy balances to log the query and they will have the same sent to their registers email. If insurance companies exploit the use of social media in client servicing, it will lead to reduced lines and man time.

It will also lead to reduced cost in advertising and serve as an effective way of launching products which are targeted to their current customers or even when making announcements. Customers feel appreciated if their company can communicate from time to time as opposed to the viral phone calls.

Companies outsource social media managers but it will be advisable to setup a team in house who already understand the company’s products.

Please follow me on @bizwise 

Bancassurance - Leverage On The Bank's Branch Network

You Deserve a Life Policy

Bancassurance is emerging in Kenya as the next frontier both in income growth for insurance companies and insurance penetration.

Most of the leading insurance companies in Kenya are partnering with banks to offer insurance products through the banks distribution network. Insurance companies such as jubilee Insurance Company who have already partnered with DT bank due to their shareholding interests. So what happens to the insurance companies that do not have relationships with banks? The way forward is entering into agreements with one or more banks in order to use their banks network.

The most interesting lead in bancassurance in Kenya is Barclays Life which is a wholly owned subsidiary of Barclays bank Kenya (shareholding structures have not been cited yet).

Barclays has set up Barclays life to offer insurance products in Kenya. The model has already worked for them in other African states through ABSA Life which is a member of Barclays operations in Africa.

Barclays Life in Kenya already has a head start. Through its various branch network in Kenya, if they are to establish a Life operation in each of those branches they are more likely to have a wider foot print in the country and push insurance distribution centres close to the people.

The underwriter is also likely to benefits from the lower cost per sales made possible by the sizable loyal customer base through its banking network customers. They also enjoy significant brand awareness in the country providing lower per cost in marketing and advertising.

Another strategy to be realised by the underwriter is the use of the bank’s strong marketing and processing capabilities. The use of strong communication channels such as direct mails and ATMS. The use of technology has resulted in improvements in transactions processing and greater customer service. The use of ATMs will offer an efficient channel of insurance distribution and as a mode of premium collection where potential customers can easily purchase and insurance policy and for current customers can use to pay their premiums.

The underwriter is also going to benefit from its own current insurance business generations like its huge loan book which the bank has been using other insurance providers as they have been doing.

By successfully mining their customer database and leveraging on its brand reputation and distribution systems, the underwriter is likely to enjoy an exponential growth and develop a unmatched client base. If they exploit the bancassurance strategy in a targeted manner we are likely to see prosperous Life company kenya

Product of The Week from Aon: Total Employee Benefits Solution

Total Employee Benefits Solution

The Aon Kenya Total Employee Benefits Solution is an innovative, practical and holistic employee benefits solution that provides employers with one employee benefit solution as opposed to separate and independent solutions i.e Group Life Assurance, group Personal accident and WIBA covers. The employees are fully covered from all risks ranging from accidents, illness or death through natural causes irrespective of which sector they may be engaged in while its cost effective.

Aon Total Employee Benefits Solution comprises of the following:

Death Benefit – A sum equivalent to 3 years salary is paid out if a member dies from an illness. If a member dies from an accident or occupational related cause, a sum equivalent to 8 years salary is paid out

Critical Illness Benefit – This benefit pays out a sum equivalent to 30% of the Death Benefit’s( up to a Max 5 M agreed with the insurer) on diagnosis of any of the following critical illnesses; Heart attack, Stroke, Cancer, Kidney Failure, Coronary Artery Disease Surgery, Major Organ transplant & Paralysis, paraplegia and Blindness.

Permanent & Partial Disability Benefit – If a member becomes totally and permanently disabled due to illness, this benefits pays out a sum equivalent Three (3) Years salary. But if permanent and total disability occurs due to accidents or occupational related causes the member is paid a sum equivalent to his/her 8 years salary. Proportionate amounts are payable for partial disability as per the continental scale.

Temporary Total Disability – The benefit seeks to reimburse the company for the days the member is unable to work and he/she is still earning a salary due to an accidents. The benefit usually runs for a period of 2 years. Or until the member recovers whichever is earlier.

Funeral Expense Benefit – The benefit pays out a sum equivalent to a capital sum usually Kshs. 100,000 within 48 Hours of notification of notification of death.

Medical Reimbursement - policy will provide cover for medical expenses incurred following accidental injury subject to policy limits. The expenses are reimbursed upon the production of the relevant medical bills but arrangements may however be made to have the bills paid directly to the attending medical institution.

 The policy does not cover pre-existing physical or mental defects, self-exposure to hazardous activities like death from drugs/alcohol, suicide and war risks unless special arrangements are made.

Free Cover Limit – We negotiate with the insurers on the best applicable free cover limit depending on the risk within the scheme and also ensure minimal people are required to go for medical examinations in order to have their full covers

Benefits of the Aon Kenya Total Employee Benefits Solution;

a)         Administration: The combined product provides for ease of administration as the all the policies are handled through a single point of contact and no need to contact different handlers on the different policies.

b)         Elimination of duplication of covers: since this cover combines Group Life and GPA/WIBA, the solution eliminates duplication of cover which would arise if all the covers were taken up separately.

c)         Cost efficiency: Due to elimination of duplicated covers and merging of covers the costs are reduced even as an employer is able to adequately safe guard the employee against illness and accidental risks whether occupational on non-occupational related

d)         Talent attraction & retention: With this solution, all employee benefits are covered and employers are able to attract and retain top talent due to more attractive and competitive benefits.

e)         Compliance: Management of the risk exposures to ensure stability of insurance costs and compliance with the legislation (WIBA)

f)          Medical tests: Medical tests for those above the Group Life Free Cover Limit can be done through the medical cover

Insurance Magazine

The first insurance tabloid in Kenya is here. We will be sharing insurance information before it becomes news. Below are some of the areas we will be keeping a close eye on;

• New products
• New insurance companies setting up
• Mergers
• Various performances
• Manpower movements in the industry
• Events and promotions
• Emerging trends
• Advise on matters insurance
• polls on best companies on customer service and claims settlement
• Jobs

We will also be featuring various insurance companies and an award for the insurance company of the month.

We will also be posting insurance medals for outstanding achievements and share stories of the gurus in the industry.

We will keep engagements with the general public. We will not be editing public sentiments safe for the cases where such sentiments are targeting, tribal or considered lacking moral.

Chief Editor

Nyankabaria Emmanuel