INVESTIGATIONS are under way over claims that British banks could be linked to a major corruption scandal involving the politically powerful Gupta family in South Africa.

Former cabinet minister Peter Hain raised concerns with Chancellor Philip Hammond that banks including HSBC and Standard Chartered could have acted unknowingly as “conduits” for laundered cash.

The scandal has engulfed the South African state with leaked emails and official investigations leading to allegations that the billionaire Gupta family had “bought influence in the government to loot state enterprises.”

Both South African President Jacob Zuma and the Guptas deny corruption charges, however there have been large demonstrations in South Africa accusing them of being “thieves” and calling for Mr Zuma to resign.

According to the peer, companies linked to the Gupta family are “suspected to have been set up for the purposes of transnationally laundering an estimated £400 million of their illicit proceeds.”

Speaking in the Lords, Mr Hain said “expert South African whistleblowers” claimed that the banks “must have been conduits for the corrupt proceeds of money stolen from their taxpayers and laundered through Dubai and Hong Kong.”

Mr Hain, who grew up in South Africa, has written to Mr Hammond with a list of 28 names including President Zuma, 11 members of his family, 11 members of his close friends in the Gupta family and their five associates.

A Treasury spokesman said they had passed Mr Hain’s letter to the Financial Conduct Authority (FCA) and law agencies along with the National Crime Agency and Serious Fraud Office.

An FCA spokeswoman said it was “already in contact with both banks named.”