French Finance Minister Michel Sapin summoned Societe Generale SA’s top management for an unscheduled meeting Tuesday following media reports about the bank’s past dealings with a Panama-based law firm.
A Monday report by the International Consortium of Investigative Journalists, drawing on 11.5 million records extracted from Panama-based law firm Mossack Fonseca, shows how European banks including Societe Generale once helped customers create offshore entities. While the use of these offshore companies can be perfectly legal, the documents have drawn global attention since their first publication on Sunday because they demonstrate the extent of efforts to shelter celebrities, business leaders and politicians using secretive financial tools.
Societe Generale’s top management was asked to meet Sapin for explanations following media reports, Budget Minister Christian Eckert said on LCP television Tuesday. Controls are underway and all options may be explored, including possibly sanctions, even if “we are not yet there,” he added. Societe General declined to comment on the meeting.
Societe Generale has a “proactive policy with regard to the fight against fraud and tax avoidance,” it said in a statement Monday, confirming that it spoke about the closure of its Panama business back in 2012 at a French Senate hearing. Societe Generale on Tuesday also said that it’s active only in countries that allow automatic data-sharing with competent fiscal authorities as defined by Organisation for Economic Cooperation and Development.
Societe Generale accounted for 979 offshore companies set up by Mossack Fonseca in recent decades, according to ICIJ. HSBC Holdings Plc set up more than 2,300 of those entities while Credit Suisse Group AG and UBS Group AG each account for about 1,100 of those arrangements fro clients through Mossack Finseca, ICIJ reported.
Societe Generale, as part of its private-banking activities, provides services to holding companies for its customers in a “transparent way” and respects all applicable rules to fight tax fraud and evasion, it said Tuesday. “As of today, the number of active structures created via Mossack Fonseca for clients amounts to a few dozen,” the bank said.