Mr Shah banked with a private arm of HSBC. In September 2006 he wanted to transfer out $30m; in February 2007 he wanted to transfer out another $9m. They were to go out in four tranches. The smallest tranche (by far) of $7k was to go to an ex-employee. HSBC however smelt a rat. Was this money laundering? The money had only come into his account in July 2006. HSBC therefore put a stop on things; none of the transactions went through.
The ex-employee, stiffed out of his small payment, was extremely disgruntled. He grassed Mr Shah up to the Zimbabwean authorities as a suspected money launderer. Zimbabwe therefore froze Mr Shah’s assets; Mr Shah in turn sued HSBC for mucking him around. For $300,000,000.
HSBC relied on defences in the Proceeds Of Crime Act 2002 that let it hold on to the money while it reported matters to the authorities. The problem was HSBC had to swear that its staff had suspicions, and HSBC was extremely keen to keep the members involved anonymous. Just in case. So HSBC brought out the various documents that had been pinging internally, and blanked out the names of the lowlier employees. Mr Shah said that they had to be disclosed; standard disclosure, after all, dictates the whole of any relevant documents be shown to him. Maybe some of the staff bore him grudges? They had acted maliciously? He needed to cross-examine to check. He even identified a couple of employees that might have reasons to dislike him. HSBC still refused to un-cross out the names; Mr Shah applied to court to force HSBC to do so.
The court was not impressed. The judges thought Mr Shah was fishing. Under the Civil Procedure Rules there was no need to disclose the employees’ names. Mr Shah had identified no pressing need and even if an employee had acted out of malice the decision to hold up his money had been taken by someone else - the money laundering officer.
This was in some ways an unfortunate decision. Because HSBC had a back-up argument – that public interest overrode the interests of Mr Shah. Redacting documents for such a reason would have been a most interesting spat to have decided; but because the Court had already found for HSBC on the main issue, it refused to paddle in such dangerous waters.
But the decision emphasized that the whistleblowers themselves are not so important as for establishing the mind of a corporate entity. The money laundering officer (more properly, the money laundering PREVENTING officer) was able to swear to the corporate mind. No need for anything more forensic.