United States Secretary of State Mike Pompeo blasted HSBC on Wednesday night, claiming the bank had maintained banking relationships with individuals facing American sanctions while cutting off access to Hong Kong executives of Next Digital, the publisher of Apple Daily.
The top American diplomat said it was another example of the “coercive bullying tactics” used by the Chinese Communist Party against British companies. HSBC is based in London, but generates the vast amount of its profit in Asia.
Referring to the company by its old name Next Media, Pompeo said HSBC had prevented executives of the publisher from accessing their credit cards and personal bank accounts. Media tycoon Jimmy Lai Chee-ying, the founder of Apple Daily and Next Digital, was arrested this month on suspicion of violating the city’s controversial national security law.
Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China.
“The bank is thus maintaining accounts for individuals who have been sanctioned for denying freedom for Hongkongers, while shutting accounts for those seeking freedom,” Pompeo said in a statement on Wednesday.
The US issued sanctions against 11 Hong Kong and mainland Chinese officials, including Chief Executive Carrie Lam Yuet-ngor and Commissioner of Police Chris Tang Ping-keung, on August 7 over the national security law.
In his statement and a subsequent Tweet, Pompeo did not identify the individuals facing sanctions who continue to maintain banking relationships with HSBC.
Pompeo issued the statement whilst on an overseas trip to the Middle East, tweeting on Wednesday night when he had just arrived in the United Arab Emirates. The State Department declined a request for additional comment on Thursday.
Mark Simon, a senior executive at Next Digital, told Reuters that HSBC froze Lai’s personal and private business accounts, as well as Simon’s personal and credit card accounts. Next Digital’s business accounts remains open, he said.
It was unclear if the freezes were the result of orders by Hong Kong police following Lai’s arrest. The Hong Kong police declined to comment when contacted on Wednesday night.
Next Digital did not respond to requests for comment on Wednesday night and Thursday morning. A HSBC spokeswoman declined to comment on Thursday, saying the bank does not discuss individual clients.
The United States is dismayed to learn the Chinese Communist Party continues to bully our British friends and their corporate leaders. HSBC maintains accounts for individuals sanctioned for denying Hong Kongers’ freedom, while shutting accounts for those seeking freedom.
— Secretary Pompeo (@SecPompeo) August 26, 2020
The bank’s shares fell 1.9 per cent to HK$33.30 in early trading in Hong Kong on Thursday, after declining about 1 per cent in London trading on Wednesday following Pompeo’s tweet.
Tang, the police chief, moved his mortgage on a flat in Pok Fu Lam from HSBC to Bank of China (Hong Kong) three days before the sanctions were announced. Lam said she was having difficulty using her credit cards, an inconvenience she described as “meaningless” in an interview with Chinese state television last week.
American sanctions can make day-to-day life more difficult for so-called specially designated nationals and their families, as American banks and other lenders who want to continue to access the US financial system close bank accounts and cancel credit cards.
Banks operating in Hong Kong are trying to strike a delicate balance as they find themselves caught in the middle of rising tensions between the world’s two biggest economies.
The recently passed Hong Kong Autonomy Act allows US officials to issue sanctions against foreign banks and their executives if they engage in “significant transactions” with individuals who have helped end the city’s “high degree of autonomy” from mainland China. The law did not specify what constitutes a significant transaction.
At the same time, the national security law prohibits the imposition of sanctions, blockades or other hostile actions against Hong Kong or the mainland.
Striking the right balance has been particularly difficult for HSBC, which is making a big bet on future growth in China and in Hong Kong in chief executive Noel Quinn’s massive restructuring plan.
The bank took to social media in July to defend its actions in a US investigation into Huawei Technologies and denied that it framed the Chinese telecommunication company, which is facing US criminal charges. Some Chinese media suggested the bank’s mainland business was under threat as a result.
At the same time, the bank drew the ire of politicians in the US and the United Kingdom, including Pompeo’s, over its support for the national security law after months of anti-government protests weighed on the city’s economy.
“Free nations must ensure that corporate interests are not suborned by the CCP to aid its political repression,” Pompeo said on Wednesday. “We stand ready to help the British government and its companies resist CCP bullying and stand for freedom.”
More from South China Morning Post:
- Preparing for the worst, banks in Hong Kong reviewing client lists as US preps sanctions over national security law
- China has HSBC’s taipan in a vice with few options but to fall in line with the security law for Hong Kong in the bank’s biggest market
- US-China relations: Chinese state media steps up attacks on ‘fact-twisting’ Mike Pompeo
- US orders fresh sanctions on Chinese firms over South China Sea ‘militarisation’
- US sanctions Chinese national over suspected fentanyl trafficking