Why HSBC’s indirect donations to the Conservatives (and Buzzfeed’s dismissal as a ‘conspiracy’) matters to our democracy

”HSBC is the largest bank in Europe, the seventh largest in the world. For this year’s annual sermon, there was no controversy to attract the TV cameras: no Panama Papers, no Swiss Leaks or Mexican money laundering scandals. Two HSBC AGM regulars, Nicholas Wilson (Mr Ethical on Twitter), and Fionn Travers-Smith from Move Your Money, were there to ask probing questions.

Part of their aim was to ask why, and under what circumstances, HSBC bailed out a troubled company run by a former Tory treasurer.

IPGL Ltd is a holding company, run by Michael Spencer – a former Conservative Party Treasurer and a leading fundraiser for Cameron’s 2010 election campaign. He remains chairman of the Conservative Party Foundation, which aims to strengthen the financial future of the party. IPGL Ltd has donated in excess of £4.2m to Conservative HQ and leadership candidates, including both Cameron and May, since 2005. There were additional donations of £1m from ICAP (CEO, Michael Spencer again), City Index and Michael Spencer himself, plus executive jet flights from Davos.

In 2008, at the height of the banking crisis, when most other UK banks stopped lending, HSBC extended a £214m loan to IPGL, secured against shares in Spencer’s brokerage firm ICAP and 14 other public and privately listed companies held by IPGL group. HSBC also extended the loan into 2015 instead of 2011 as initially agreed.

Taking shares as security, related to the company being lent to is risky, because if the company runs into financial difficulties, the collateral is unlikely to be worth much.

That’s the brief introduction sorted.”


Thanks to NLAT for the information.

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