Standard Chartered shares dive after Iran claims | News | DW | 07.08.2012
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Standard Chartered shares dive after Iran claims

Standard Chartered shares have lost billions of dollars in value in just one day. It follows accusations the bank made hundreds of millions of dollars in secret transactions with Iran.

Shares in the global bank, which is based in London, have plummeted after New York's bank regulator threatened to revoke Standard's state license, for allegedly hiding a money laundering scheme with Iran worth $250 billion (201.2 billion euro).

The New York State Department of Financial Services (DFS) says Standard Chartered "schemed" with the Iranian government, and hid 60,000 secret transactions over nearly 10 years, to generate hundreds of millions of dollars in fees. Iran is subject to United States sanctions over its nuclear program.

Regulators say the transactions left the US financial system open to terrorists, and meant law enforcers did not receive crucial information to track criminal activity. The DFS has ordered the bank to a meeting on August 15 to explain itself.

Standard Chartered has rejected the accusations, saying most of the transactions complied with US Treasury regulations, and those that did not were worth less than $14 million.

Annemarie Durbin, the bank's group secretary, told the told the Hong Kong exchange on Tuesday that the bank did not believe the allegations presented a "full and accurate picture of the facts."

In a statement, Durbin said the bank told US authorities in January 2010 that it was reviewing US dollar transactions, mainly between 2001-07.

She said the bank's "review of its Iranian payments also did not identify a single payment on behalf of any party that was designated at the time by the US government as a terrorist entity or organisation."

"The analysis that the group shared with all the US agencies demonstrates that throughout the period the group acted to comply, and overwhelmingly did comply, with US sanctions and regulations," said Durbin.

How the stock is faring

In London, the bank's stock plunged more than 20 per cent at one point - its steepest fall in around 24 years - to finish down 16.4 percent, in what's become in its biggest one-day sell off in four years.

The shares finished the day down 15.9 per cent in Hong Kong.

"Broader implications are (that) there is no clean bank in the UK and the UK regulatory system will be under scrutiny. You have the last of the Mohicans and if they've gone, this whole sector is tainted," said Chirantan Barua, senior analyst at Sanford Bernstein.

"Bad news for banks once again as the daggers are out for Standard Chartered, with US regulators flexing their muscles," said Simon Denham, Capital Spreads boss.

"The stock is being absolutely investors fear that they might have been doing something illegal for years."

jr/mz (dpa, Reuters, AFP)