Standard Chartered says sorry over sanctions gaffe
Thursday 21 March 2013
The chairman of banking giant Standard Chartered, Sir John Peace, was today forced to make a grovelling apology for remarks he made this month which suggested the bank had not deliberately broken United States sanctions.
Last year Standard Chartered was fined $667 million (£441 million) by the US Department of Justice and New York Attorney General for major breaches of sanctions against Iran and three other countries.
As part of the deal with US regulators the bank entered into a deferred prosecution agreement with the Department of Justice. This includes a charge of violating the US International Emergency Economic Powers Act, which will be dismissed after two years only if the bank sticks to the agreement.
Peace, 64, who is also chairman of credit agency Experian and fashion group Burberry, has been coming under growing pressure to give up at least one of his roles.
He chaired the bank’s press conference after its full-year results on 5 March, where he said: “We had no wilful act to avoid sanctions; you know, mistakes are made, clerical errors, and we talked about last year a number of transactions which clearly were clerical errors or mistakes that were made…”
Today he said: “I made the certain statements that I very much regret and that were at best inaccurate.”
Peace then went on to apologise on behalf of himself, chief executive Peter Sands and finance director Richard Meddings saying his comment had been “legally and factually incorrect”. He added: “Standard Chartered Bank unequivocally acknowledges and accepts responsibility, on behalf of the bank and its employees, for past knowing and wilful criminal conduct in violating US economic sanctions laws and regulations, and related New York criminal laws, as set out in the deferred prosecution agreement.”
The bank declined to comment any further on the statement but sources said it had been drawn up following extensive discussions with the Department of Justice.
“They tried to play hardball with the US regulators and lost,” said Simon Maughan, analyst at Olivetree Securities.
Before the settlement with the regulators last year Standard Chartered had always claimed that the sanctions breaches had largely been made through clerical errors and that it was being unfairly targeted by the authorities. But once it reached a deal with the US regulators its statements were far less strident until Peace’s remarks at the press conference.
Peace was paid $1.82 million by Standard Chartered in 2011 and £374,000 by Experian and £350,000 by Burberry last year. Some investors have questioned whether anyone should be allowed to chair three FTSE 100 companies and those questions are likely to become louder after today’s apology.
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