Company News HSBC ‘far from safe’ amid controversial stances

Faced with growing controversy over the legal battle with Chinese technology giant Huawei and a lingering ambiguous attitude toward Hong Kong's national security law, multinational bank HSBC has been under tremendous pressure in recent days.

Legal experts pointed to previous legal documents that they said showed the bank might have set a trap for Huawei's chief Financial officer Meng Wanzhou. The Londonbased lender may now face a worsening dilemma, where it's far from safe from reprisals, some observers said.

If the claims are found to be true, HSBC will no longer be a victim but a criminal set to face sanctions under Chinese law, said legal experts.

According to legal documents posted on the official website of the US Department of Justice on 24 January 2019, Meng requested an in-person meeting, which took place on 22 August 2013, with HSBC – referred to as Financial Institution 1 executive in the document.

During the meeting, Meng spoke in Chinese, relying in part on a PowerPoint presentation written in Chinese. Upon request by HSBC, Meng arranged for an English-language version of the presentation to be delivered to HSBC.

The presentation, which was later handed over to the DOJ by HSBC, and which the DOJ alleges contained "numerous misrepresentations", played a key role in the US charges against Meng, who's been under detention in Canada for more than a year.

Meanwhile, the bank had its own issues in the face of US sanctions, which are also believed to be among its reasons for "betraying Huawei".

Local media in Hong Kong reported that HSBC engaged in a money-laundering case in Mexico, which made it enslaved to US authorities, helping them set a trap and betray the bank's customer Huawei.

A legal document dated 11 December 2019 showed that HSBC Bank USA violated the US Bank Secrecy Act by failing to maintain an effective anti-money laundering programme and conduct appropriate due diligence on its foreign correspondent account holders.

Nevertheless, the bank is described as a "victim institution" by the DOJ and is not under investigation in Huawei's case.

HSBC also terminated its relationship with Huawei in 2017.

"If the claims were proved to be true and HSBC is working as an 'agent' for the US government, the bank is setting a trap for Huawei, rather than being a victim as it claimed," Yue Dongxiao, a USbased lawyer who is closely observing the lawsuit, told the Global Times on Tuesday.

Moreover, Yue said that a fraud claim in Meng's case may not be established anymore, as there's nobody who has been deceived or damaged.

Ren Zhengfei, founder of Huawei, has said that HSBC was not innocent and it knew about Skycom's business in Iran from the beginning and it also understood Skycom's relationship with Huawei, which can be proven by emails between HSBC and Huawei. Huawei has long described the firm Skycom as a separate local business partner in Iran.

HSBC said in an emailed statement previously that it is not a party to this case, adding that HSBC responded factually to the USDOJ's requests for information.

"The evidence on which DOJ has relied, including representations made by Huawei to HSBC in 2013, are part of the public record," it said.

Experts added that HSBC, which has been blamed for its late support for the national security law, and an alleged role in funding Hong Kong rioters over the past year, is "far from safe in China", where it generated about 80% of its profits.

"Chinese people will definitely not welcome foreign banks like HSBC, which for its own interests cooperates with US imperialism's global hegemony and substantially harms the development of China's high technology," Li, an industry insider and close observer of Chinese policies, told the Global Times on Monday.

"The Chinese market will definitely not sit idle," Li said.

HSBC cooperated with US' "longarm jurisdiction" to transfer personnel and data located in China without the permission of the Chinese government, which violated Chinese law, a legal insider who preferred to be anonymous told the Global Times.

The bank, which is also a leading lender in Hong Kong, had been reluctant to show its attitude on the upcoming national security law for Hong Kong.

Former Hong Kong chief executive Leung Chun-ying wrote on Facebook on 29 May that HSBC should not damage China's sovereignty and dignity or hurt Chinese people's feelings, while making money in the country.