HSBC (HSBA.L) boss Noel Quinn said he would be committing a crime and putting customers at risk if he did not freeze the accounts of Hong Kong activists involved in protests against China last year, which he said was done at the request of law enforcement agencies.
Quinn was grilled by the UK Parliament Foreign Affairs Committee along with the group’s chief compliance officer Colin Bell.
The CEO explained that the decision was not made based on political affiliation or activity but rather because the bank was legally obliged to freeze certain accounts on request of the police while it undertook its investigations.
“I’m not in a position as a banker to be able to judge the motives or the validity of a legal instruction from a law enforcement authority. I can’t do that in the UK or any market. As long as it’s a formally constructed legal instruction I have to comply with it as any other bank would have to,” said Quinn.
“Otherwise I commit a criminal offence… and put not only our customers at risk and the deposits that they have placed with us but put the whole institution at risk,” he said, adding that “I can’t cherry pick which law or which legal instruction to follow.”
When asked if he was comfortable with the decision to freeze accounts, he said he was not in a position to make a moral judgement but what he, along with the bank’s legal and compliance team, do is they exercise due care to make sure the request is official and all laws are being applied correctly.
The protests in question were against China’s tightening of control over the former British colony and its widely-condemned security law.
The bank has come under scrutiny not just for freezing activists’ accounts but also for HSBC’s chief executive of the group’s Asian businesses, Peter Wong, signing a petition supporting the law last year.
Quinn insisted the petition was not a political statement but was asking the security situation to be addressed.
The London-based bank counts Hong Kong as its largest market and relies relying on China and Hong Kong for a big chunk of its profits.
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When asked if he could consider withdrawing from Hong Kong, Quinn’s answer was a firm “no.”
“We’ve been in Hong Kong for 155 years... I am 100% committed to Hong Kong and its people. We have helped their economy and communities progress and develop over time and as challenging as the geopolitics are, at the end of the day I want to help it continue to develop.”
In a Facebook post over the weekend, former Hong Kong lawmaker Ted Hui, whose account was frozen by the bank, said that members of the Foreign Affairs panel contacted him.
He said that he provided the committee with detailed information on cases where his and his families accounts were frozen.
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.
When asked about Hui by Foreign Affairs Committee, Quinn said he would like to draw attention to a statement made by the police in which it confirmed it froze Hui’s accounts as well as those of family because he was accused of misappropriating money.
HSBC isn’t the only bank under scrutiny over Hong Kong. Standard Chartered (STAN.L) has also faced backlash for supporting the law. A spokesperson for Standard Chartered said last year that the law could “help maintain the long-term economic and social stability of Hong Kong.”
The banks’ support has caused uproar in Britain, where both banks are headquartered and list their shares.
The Telegraph reported last month that hundreds of senior employees at both banks have been members of the Chinese Communist Party.
It said leaked lists showed that at least 335 HSBC employees were members, including the senior vice-president of HSBC China, the president of HSBC’s Shenzhen office and the deputy manager of Hong Kong corporate and consumer products.
When asked if there was any follow up on this Quinn said: “I don’t know the political affiliation of any employee in HSBC and I’m not going to ask all my colleagues in China if they are a Communist party member when I don’t ask that question in the UK or any other market.”
Meanwhile, HSBC isn’t in China’s good books either. Chinese media reported the bank had "framed" Huawei and played a role in the arrest of the chief financial officer of the telecoms equipment maker.
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