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MUMBAI, Feb 24 (Reuters) - Indian tax officials searched theMumbai headquarters of HSBC Holdings PLC last week aspart of a probe related to allegations that the bank's Swissbusiness helped clients dodge taxes, a person with knowledge ofthe matter said on Tuesday.
The search came as HSBC prepared to release its annualreport on Monday, in which the bank said it had received arequest for information from Indian tax authorities.
India's cash-strapped government is cracking down on taxevasion as a means of boosting revenue. In October, it said thestate was prosecuting several individuals on suspicion of havingundeclared assets outside the country.
Its pursuit of Europe's biggest bank comes after details ofHSBC's Swiss private banking operations and top clients werewidely published in the media, sparking regulatory inquiriesworldwide that could result in significant fines.
India, Asia's third-largest economy, is the only Asiannation to aggressively investigate HSBC relating to allegationsof helping customers pay less tax. The bank's Swiss client listnumbered 1,195 wealthy Indians, the Indian Express newspaperreported.
"Tax department officials visited the bank's headquarterslast week in Mumbai, and asked for documents related to thiscase," said the person, who was not authorised to speak withmedia on the matter and so declined to be identified.
HSBC said, without elaborating, that it is cooperating withIndian authorities.
On Monday, HSBC's chief executive said allegations about itsGeneva-based private banking arm, raided last week by Swissofficials and now the subject of a British inquiry, had damagedHSBC's image and brought "shame" on the bank.
HSBC said authorities in countries including Belgium,France, Switzerland, Argentina and India were investigating orreviewing the local operations of its Swiss private bank inconnection with allegations of tax evasion or tax fraud, moneylaundering and unlawful cross-border banking solicitation.
HSBC said there was a high degree of uncertainty regardingthe terms, timing and size of potential penalties. (Reporting by Sumeet Chatterjee; Editing by ChristopherCushing)
