UBS AG needs to pay 1.1 billion euros in bond deposit after they have been denied appeal by the French Court of Appeals. This is in line with the allegations against Switzerland's largest bank of money laundering.
The investigative judges led by Guillaume Daief, required the security deposit after settlement talks last July. The decision of the bond payment was scheduled to be released on September 22. The deposit amount is about 40 percent of the 2013 net income of UBS.
UBS AG has been the focus of incumbent French President Francois Hollande's objective to curb tax fraud. The French court's decision signals the determination of the French government to eradicate corruption as well as fight against money laundering. This determination stemmed from the recent scandal of his former budget minister Jerome Cahuzac, who was found to have secret Swiss accounts. Hollande is adamant to pursue his focus on this issue.
The French government aims to collect an estimated amount of 2 billion euros from tax evaders this year.
French investigators are also reported to be looking at HSBC Holdings Plc on the sidelines if they have also encouraged tax evasion. No formal charges have been filed.
UBS AG is a Swiss global financial service company known for its in investment baking, asset and wealth management services for institutional, corporate, private and retail clients as its main line of buisnesses. UBS is based on Basel and Zurich in Switzerland.
The Swiss banking giant is currently operational in more than 50 countries globally employing more than 60,000 employees in total. UBS holds the world's biggest private wealth amounting to more than CHF 2.2 trillion in private assets.
UBS had suffered one of the largest losses during the subprime mortgage crisis compared to other European banks. In 2008, UBS had received a capital injection of $9.7 billion from one of the its biggest shareholders, Government of Singapore Investment Corporation and another $1.8 billion form a Middle Eastern investor.
