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Saturday, Jan 16, 2021

Frozen accounts send mixed signals

Frozen accounts send mixed signals

HSBC was unexpectedly dealt a fresh blow on the weekend after accusations by former lawmaker Ted Hui Chi-fung that his and his family's bank accounts in HSBC, Hang Seng Bank and Bank of China (Hong Kong) had been frozen went viral in the media here and in the West.
Adding to the mystery was Hui's discovery that he and his family were allowed to use their HSBC accounts a number of hours later.

Taking no chances, they immediately transferred their savings to somewhere "safe."

Yesterday, the freeze was back on again.

This is a drama that HSBC could have well done without. The timing could not be any more sensitive as the US is expected to follow up its earlier sanction lists against Hong Kong with a secondary list to include financial institutions in relation to the national security law.

Remember how US Secretary of State Mike Pompeo had previously publicly criticized HSBC over the national security law? No doubt HSBC would like to keep its head as low as possible right now.

Financial Secretary Paul Chan Mo-po said Hong Kong's financial system is robust and - though not commenting on Hui's case in particular - insisted the system has been able to weather challenges faced by the SAR since the outbreak of anti-extradition bill protests and the Sino-US trade war.

Chan was probably right to say the system is still robust, but bear in mind that even isolated incidents can gradually chip away confidence.

Executive Council member Ronny Tong Ka-wah's observation - that the act of freezing the bank accounts of Hui's family members could be an oversight by the police - could have hit the mark.

People believe that private property ownership is guaranteed and, if someone's property is to be frozen, the authorities have to go through proper legal procedures.

Yesterday, after first accusing Hui of money laundering over a crowdfunding exercise, police were quick to add that he was also suspected of breaching the national security law.

The force is believed to have come under pressure after Hui travelled to Denmark to speak to "foreign powers" and broke his undertaking to the court that he would return home afterwards.

If the order to freeze the bank accounts of Hui and his family at the weekend fell in an area that - if not illegal - is certainly gray, yesterday's move is on firmer ground due to the powerful national security law.

Information so far has been conflicting and HSBC's "clarification" on the matter was wishy-washy, containing little useful information.

Hui said his family has several million dollars in savings in five bank accounts, but while trying to access the money online they received messages that the available balances were zero.

But the police said only HK$850,000 was affected.

Hui's case may be isolated but, if handled poorly, it could have a far-reaching impact on Hong Kong as a financial center.
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