HSBC’s CEO Faces U.K. Questions Over H.K. Account Freezes
(Bloomberg) -- HSBC Holdings Plc’s Chief Executive Officer is set to be grilled by British lawmakers about the lender’s moves to freeze accounts of activists in Hong Kong, the latest sign of the political tensions buffeting Europe’s largest bank.
Noel Quinn is set to appear before the U.K. Parliament Foreign Affairs Committee Tuesday. Quinn is listed as a participant, along with Colin Bell, the bank’s chief compliance officer, at a private and public hearing on Tuesday, according to a parliament schedule.
The London-based bank, which counts Hong Kong as its largest market, has been caught in the midst of growing tension as China tightens control over the former British colony. The bank has faced criticism -- and lost business -- in China for cooperating with the investigation into Huawei, and been reprimanded in Washington and London after its top executive in Asia publicly endorsed a controversial security law imposed on the city. A local church has also accused the bank of freezing its account.
In a Facebook post on Saturday, former Hong Kong lawmaker Ted Hui, whose account was frozen by the bank last year, said that members of the Foreign Affairs panel have contacted him. He said that he has provided the committee with detailed information on cases where his and his families accounts were frozen.
“This one-off session will aim to explore HSBC Group’s perspective on recent issues in Hong Kong and China, including the recent freezing of accounts of activists involved with the Hong Kong protests.” a committee statement said. “The session is expected to touch upon a number of recent events in Hong Kong, including the passing of the Security Law and will provide an insight into how U.K.-based businesses navigate international regulatory and political frameworks.”
In a letter to Hui earlier this month, Quinn explained that the bank was forced to freeze the accounts at the request of the police. The pro-democracy lawmaker was among those arrested in connection with a disruptive protest in the legislative chamber in May. He was out on bail when he fled the city last year and is now in exile.
Hui has rejected Quinn’s explanation, saying he “failed to provide the legal basis” for the account lockdown. An HSBC spokeswoman declined to comment. The bank had earlier said it can’t comment on specific accounts.
“HSBC is in an impossible position and at the end of the day, I don’t think its sustainable for them,” said Richard Harris, chief executive officer at Port Shelter Investment Management. “They are already highly compliant and yet they are asked to do more, and conflicting things by both sides.”
The situation is getting increasingly politicized for HSBC. The bank is likely to provide a strategy update alongside its full-year results on Feb. 23.
HSBC Chairman Mark Tucker said last week “the world had changed” in the 11 months since Europe’s biggest bank announced a long-awaited overhaul, forcing the lender to make its plans more radical. The bank is confirming areas of focus, especially in Asia, and sees opportunities to grow its wealth business and expand across South Asia, he added.
The lender’s shares in London fell as much as 1.6% on Monday morning and are down about 28% in the past year.
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