Standard Chartered fights back

Bank chief blasts 'factually inaccurate material' behind US claims of laundering

Standard Chartered chief executive Peter Sands staged a robust defence of his bank yesterday in his first public comments on the controversy over its dealings with Iran since rushing back early from his summer holiday.

Responding to accusations that the bank defied US sanctions on Iran by laundering as much as $250bn (£161bn) of Iranian money between 2001 and 2007, Mr Sands cast doubt on the integrity of New York's State Department of Financial Services by refuting many of the facts surrounding the allegations and criticising the manner of their disclosure.

"Frankly, there is a lot of material here that we do not recognise or understand, or that is factually inaccurate," he said in a hastily convened press conference late yesterday afternoon.

Mr Sands went on to dismiss an already-infamous allegation in the New York regulator's 27-page report of its case against the bank – that a senior Standard Chartered executive gave short and colourful shrift to a warning from a US colleague of potential problems in dealing with Iran.

On hearing the warning, the executive – whom Mr Sands confirmed yesterday to be his number two, finance director Richard Meddings – allegedly retorted: "You fucking Americans. Who are you to tell us, the rest of the world, that we're not going to deal with Iranians?"

However, Mr Sands used the same phrase to deny the allegation twice yesterday: "We do not believe the quote is accurate," he said. Mr Sands declined to say whether he or his team recognised the warning that the New York regulator claimed sparked Mr Meddings' alleged retort.

Friends and colleagues of Mr Meddings said such language would be highly out of character for the relatively mild-mannered executive. Mr Sands also criticised the regulator for claiming Standard Chartered made "several hundreds of millions of dollars" in fees between 2001 and 2007 from so-called U-turn transactions when the actual amount was "in the tens of millions".

Before they were outlawed in 2008, U-turns allowed US-based banks to process some highly-scrutinised dollar-denominated transactions for Iranian banks or individuals provided that a bank that was neither American or Iranian acted as intermediary on both sides of the deal.

The US government eventually scrapped U-turns on fears that Iran was using its banks to finance nuclear weapons and missiles programmes.

Mr Sands reiterated yesterday that more than 99.9 per cent of the $250bn worth of U-turn transactions the regulator highlighted complied wit regulations governing them, leaving less than $14m that didn't.

He also criticised the regulator for giving the bank no prior notice of its order, the publication of which, he said, "came as a complete surprise to us".

Mr Sands conceded that the episode, which knocked more than £8bn off its value as shares fell by more than a quarter in just two days on Monday and Tuesday, had knocked Standard Chartered badly.

"Clearly this has been very damaging and it would be unrealistic to pretend otherwise…. It's obviously a very serious and difficult set of issues that we've been facing."

"I don't think there is anything wrong with the culture at Standard Chartered…We take our responsibilities very seriously, always seeking to comply with rules and regulations."

Bank shares climb: Bargain-hunters to the rescue after a mauling

Shares in Standard Chartered yesterday clawed back some of the steep losses they had made since the money-laundering allegations surfaced from US regulator Benjamin Lawsky on Monday.

They closed up 87p, or 7 per cent, at 1315.5p as bargain-hunters decided the 22 per cent rout was overdone. Buyers were encouraged by a flurry of analysts' claims that the shares now represented good value.

The bank run by Peter Sands had until now dodged the worst damage of the global financial crisis. Analysts pointed out that even in the event of a massive fine and a loss of its banking licence in the US, the bank would still be a valuable takeover target for rival JPMorgan.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250 ...

Reach Volunteering: Trustees with Finance, Fundraising and IT skills

Voluntary and unpaid, reasonable expenses reimbursable: Reach Volunteering: St...

Day In a Page

Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
10 best PS4 games

10 best PS4 games

Can’t wait for the new round of blockbusters due out this autumn? We played through last year’s offering
Migrant crisis: UN official Philippe Douste-Blazy reveals the harrowing sights he encountered among refugees arriving on Lampedusa

‘Can we really just turn away?’

Dead bodies, men drowning, women miscarrying – a senior UN figure on the horrors he has witnessed among migrants arriving on Lampedusa, and urges politicians not to underestimate our caring nature
Nine of Syria and Iraq's 10 world heritage sites are in danger as Isis ravages centuries of history

Nine of Syria and Iraq's 10 world heritage sites are in danger...

... and not just because of Isis vandalism
Girl on a Plane: An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack

Girl on a Plane

An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack
Why Frederick Forsyth's spying days could spell disaster for today's journalists

Why Frederick Forsyth's spying days could spell disaster for today's journalists

The author of 'The Day of the Jackal' has revealed he spied for MI6 while a foreign correspondent
Markus Persson: If being that rich is so bad, why not just give it all away?

That's a bit rich

The billionaire inventor of computer game Minecraft says he is bored, lonely and isolated by his vast wealth. If it’s that bad, says Simon Kelner, why not just give it all away?
Euro 2016: Chris Coleman on course to end half a century of hurt for Wales

Coleman on course to end half a century of hurt for Wales

Wales last qualified for major tournament in 1958 but after several near misses the current crop can book place at Euro 2016 and end all the indifference
Rugby World Cup 2015: The tournament's forgotten XV

Forgotten XV of the rugby World Cup

Now the squads are out, Chris Hewett picks a side of stars who missed the cut
A groundbreaking study of 'Britain's Atlantis' long buried at the bottom of the North Sea could revolutionise how we see our prehistoric past

Britain's Atlantis

Scientific study beneath North Sea could revolutionise how we see the past
The Queen has 'done and said nothing that anybody will remember,' says Starkey

The Queen has 'done and said nothing that anybody will remember'

David Starkey's assessment
Oliver Sacks said his life has been 'an enormous privilege and adventure'

'An enormous privilege and adventure'

Oliver Sacks writing about his life
'Gibraltar is British, and it is going to stay British forever'

'Gibraltar is British, and it is going to stay British forever'

The Rock's Chief Minister hits back at Spanish government's 'lies'