UBS faces fine of up to $8 billion in French tax probe

UBS faces fine of up to $8 billion in French tax probe
UBS noted that while millionaires say they value their family above everything else, they also believe that they sacrifice too much time away from their family to get to where they are.

ZURICH - Switzerland's largest bank UBS could face a fine of up to US$6.3 billion (S$8 billion) if found guilty in an investigation in France into whether it helped wealthy customers there avoid tax, a Swiss newspaper reported on Friday.

A French court has already ordered UBS to deposit a 1.1 billion-euro (US$1.4 billion) guarantee to cover a portion of potential fines in the case, but Swiss newspaper Le Temps said it had seen a legal document showing the bank could face a penalty of up to 5 billion euros.

The document, written by two judges, is dated July 23, the same day the bank was first ordered by French officials to pay the guarantee.

Le Temps quoted the document as saying "the business model of UBS Switzerland was to offer its clients bank secrecy in contradiction to (French) fiscal authorities".

Shares in UBS fell by as much as 3.2 per cent on Friday but pared losses to trade down 1.4 per cent at 0942 GMT (0542 EDT), still lagging the European banking sector which was up 1.1 per cent.

UBS said the basis for any calculations of potential fines was artificial and speculative.

"We cannot control the irresponsible disclosure of confidential documents or their selective interpretation," UBS said in a statement.

"This matter is currently still in the stage of a formal investigation and we will continue to defend ourselves strongly."

Last month, the bank said it would again appeal against a French court ruling demanding the guarantee payment after an initial appeal was turned down.

On top of the French case, UBS is also dealing with allegations it was involved in rigging foreign exchange rates. The bank warned earlier this week it faced new fines after confirming it was holding talks to settle these allegations.

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