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UBS In Test Case For Tax Evasion Probe

Sep 19, 2014 01:54 AM EDT | By Staff Reporter

UBS AG, the world's biggest wealth manager, has been the focus of French President Francois Hollande's aim to curb tax-evasion.

The bank will know on the 22nd of September if the French court of appeals will be requiring a $1.4 billion bail from UBS as bond for the alleged money laundering issue. The bail amount is around half as much of the estimated funds the bank allegedly laundered. It is estimated to be roughtly 40 percent of the bank's net income last 2013.

This move signals the strength and determination of the French government to fight against corruption and money laundering. French investigators are also looking at banking giant HSBC Holdings Plc to see if they have breached certain protocolas and encouraged tax evasion but no charges has been filed.

UBS AG is a Swiss global financial service company based in Zurich and Basel, Switzerland. The company is known for its strength in investment baking, asset and wealth management services for institutional, corporate, private and retail clients. UBS is the biggest bank in its home country Switzerland and is operational in more than 50 countries worldwide with more than 60,000 employees globally. It houses the world's largest private wealth with amounting to over CHF 2.2 trillion in private assets.

During the global recession, UBS was hit hard and suffered one of the largest losses compared to its European banking peers. At the height of the subprime mortgage crisis in 2007, the bank received a capital injection from one of the bank's largest shareholders, Government of Singapore Investment Corporation aside from the Swiss government's injection through equities.

Hollande is determined to fight against tax evation after his former buget minister, Jerome Cahuzac, stepped down amid scandal on his secret Swiss accounts. The government estimates a return of around 2 billion euros from tax evaders this year and more on the following year.

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