Australia is the odd man out in a multi-nation European tax probe into Credit Suisse. Now, a tax official in Sydney has weighed in with specifics.
Credit Suisse is battling the unfavorable headlines that come from raids in France and Holland, with authorities visiting the banks offices in another – the U.K.
Zurich-based Credit Suisse's offices in Melbourne and Sydney weren't searched last week, nor has the bank been contacted at all by officials, a spokeswoman in Zurich told finews.asia on Tuesday.
A high-ranking tax official in Sydney signalled that may be about to change.
Recent Client Data
Michael Cranston, a deputy tax commissioner in Australia, told «Bloomberg» that his agency is looking at recent tax violations – not harmless, decades-old ones as other leaks have outed.
Cranston didn't disclose the specific time span the Australian leaks are from.
«That’s not saying all of it’s active; some of them could have been opened in the last few years and closed very quickly. But they are more current than generally we see,» Cranston said.
Dashing Hopes
Cranston's brief comments will dash hopes at Credit Suisse that the five-nation probe is simply a media-savvy storm in a tea cup with little substance behind it.
Australia is homing in on 346 people after receiving 1,000 account details from Dutch authorities, who appear to be driving the probe, Cranston said.
«We are going to use all of the tools available to us to find out how this operates, how big it is, whether this is all the accounts.» The tax official said Australia would look at phone records to identify whether account holders had called Credit Suisse private bankers for advice, for example.
«One Bank» Push
Australia isn't part of the EU, but as with its eyebrow-raising participation in the Eurovision song contest, down under has long cooperated with Europe on criminal probes. Australian officials visited Eurojust, the European Union agency for authorities to cooperate investigations, just over two years ago.
The probe will put John Knox, an investment banker named overall head of Credit Suisse in Australia almost exactly two years ago, in the spotlight. Knox has been vocal about wanting to bolster Credit Suisse's private banking activities in Australia through its «bank for entrepreneurs» approach.
Until now, Credit Suisse is mainly known for investment banking in the country, while private banking has centered on Singapore and other local finance hubs. The bank doesn't split out how much wealth it manages per country in Asia, making it almost impossible to assess the potential impact.
Weighs on Shares
Even if the extent of the probe isn't yet known, Morgan Stanley analysts said the barrage of unfavorable headlines surrounding Credit Suisse will weigh on the bank's shares until it is clear what the five probes will cost to settle.
Nearly three years ago, the bank put a long-running U.S. investigation into tax evasion behind it by paying $2.5 billion in fines and penalties as well as pleading guilty to criminal charges.
The fresh probe comes as the bank acknowledges it owes investors an answer on how it plans to replenish its depleted capital: listing part of its valuable Swiss business, or an outright capital-raising, for example.
