U.S. Blasts HSBC for Siding With China Over Hong Kong
U.S. Blasts HSBC for Siding With China Over Future of Hong Kong
(Bloomberg) -- HSBC Holdings Plc has been accused by U.S. Secretary of State Michael Pompeo of aiding the Chinese government’s clampdown on Hong Kong.
Pompeo cited reports that the British bank had stopped executives of Hong Kong-based publisher Next Media from accessing their credit cards and personal bank accounts following the arrest of the company’s founder, Jimmy Lai. In a written statement published Wednesday, Pompeo also said HSBC continued to provide banking services to people sanctioned by the U.S.
“The bank is thus maintaining accounts for individuals who have been sanctioned for denying freedom for Hong Kongers, while shutting accounts for those seeking freedom,” said Pompeo.
The secretary of state repeated criticism of HSBC’s decision in June to allow its most senior banker in Asia, Peter Wong, to sign a petition supporting the new Hong Kong security law that critics say has stifled freedom in the former British colony.
HSBC has been monitoring accounts of the officials since any exposures related to sanctioned individuals have to be flagged internally, a person familiar said, declining to be named discussing internal matters. The bank is unlikely to approve any new account applications from them, the person added.
Representatives for HSBC declined to comment. The bank’s shares fell 1.9% to HK$33.30 in Hong Kong. They are down 45% so far this year.
“Free nations must ensure that corporate interests are not suborned by the CCP to aid its political repression,” Pompeo said. He offered support to the British government to counter what he described as the “coercive bullying tactics” of the Chinese authorities.
HSBC has been walking a tightrope amid unrelenting pressure from both China and the U.S. as tensions between the two superpowers escalated with tit-for-tat sanctions over a crackdown on Hong Kong and threats against some of China’s biggest companies. The London-based bank is seeking to expand in China to boost profits, shifting away from struggling operations in Europe and the U.S.
Other banks, including Citigroup Inc. and Standard Chartered Plc, have stepped up scrutiny of clients in Hong Kong, aiming to avoid violating U.S. sanctions on officials in the city, people familiar with the matter said earlier this month. U.S.-based Citigroup was already taking steps to suspend accounts linked to some of the 11 targeted individuals, one of them said.
Even China’s largest state-run banks operating in Hong Kong are taking tentative steps to comply with U.S. sanctions, seeking to safeguard their access to crucial dollar funding and overseas networks. At some lenders transactions via the U.S. are banned, while compliance must review and sign off on others that would previously have been immediately processed, people familiar with the plan have said.
Lai, among the first pro-democracy activists to be arrested under the new security law, was bailed out earlier this month. About HK$50 million ($6.5 million) of Lai’s assets have been frozen followed by his arrest, local media outlets including Now TV reported earlier, without disclosing the banks involved.
Shares in Next Media have soared since his detention as supporters rallied behind the businessman and his Apple Daily newspaper.
©2020 Bloomberg L.P.