Exclusive: HSBC closed accounts of jailed 2019 democracy protesters without providing a reason
Hong Kong Free Press
Soon after Castor Chan was arrested and denied bail in June 2020 for possessing arms or ammunition, he gave his family his bank log-in details. However, they were unable to access the account he held with HSBC.
Chan, who was jailed for five years, told HKFP that his family enquired on his behalf but were not told why his account had been frozen. Months later, he received letters from HSBC saying it was terminating its banking services to him.
“After a comprehensive review of your account(s), we are sorry to inform you that we will no longer be able to provide you with banking services,” a letter from HSBC to Chan dated October 14, 2020, and seen by HKFP read. No explanation for the termination was provided.
Chan, who used to be a bank manager and now works in the IT sector, completed his jail term last October. He was able to withdraw his funds after his release.
He told HKFP he then tried to open accounts at at least three other banks, but his applications were unsuccessful. He was not told why. Chan was eventually able to open an account with another bank, which he declined to name in fear that his relationship with it would be affected.
Responding to HKFP’s enquiries about the abrupt and unexplained closure of Chan’s account, HSBC said that all banks regularly reviewed customers’ activities as part of due diligence requirements: “Based on these reviews, HSBC may decide that we will no longer be able to maintain the banking relationships with certain customers,” a HSBC spokesperson said.
Chan’s experience is not unique. HKFP has learned of other protesters whose bank accounts were closed after they were arrested over offences related to the unrest in 2019.
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W was charged in 2021 over possessing explosives and was not granted bail. He asked to remain anonymous.
Although he was not apprehended during the unrest in 2019, the judge said message records of him using slang popular among protesters that year suggested that he was a “radical” who was unsatisfied with the government and the police. The prosecution said he had used his HSBC bank account to make transactions related to the case.
W told HKFP that while he was detained, his family members attempted to access his accounts, which were with HSBC, Hang Seng Bank, China CITIC Bank International and the Bank of China. They were unable to in all four instances.
He was later notified by the banks that they would not continue offering their services to them. None of them gave W a reason for terminating his accounts.
HKFP has reached out to Hang Seng Bank, China CITIC Bank International and the Bank of China.
After being released from jail last May, W spent over a month in back-and-forth correspondence with the four banks to withdraw his money. He was able to successfully open an account at another bank, he told HKFP, but also asked for it not to be named as he feared that his account may be closed.
Neither Chan nor W filed any complaints related to their cancelled accounts to the Hong Kong Monetary Authority, which oversees the city’s financial institutions.
‘Marginalised’ in society
Five years on from the protests in 2019, many who were jailed over the unrest are finishing their prison terms and returning to society, where they must deal with the fallout of their politics-related offences.
A total of 10,279 people were arrested in connection with the protests. As of the end of March, fewer than 30 per cent – or 2,961 people – have “undergone or [were] undergoing judicial proceedings,” police told HKFP in late May. Their offences include rioting, criminal damage and taking part in an unlawful assembly.
Brandon Yau, the secretary of prisoners’ support group Waiting Bird, said exclusion from basic financial services posed an additional obstacle to ex-protesters’ reintegration into society.
Without a bank account, it would be hard for them to find employment, which is already a challenge to begin with due to their criminal record, Yau said. It was hard to explain to potential employers why they did not have a bank account, he told HKFP.
“There are not many types of jobs where the [company] can pay a salary in cash,” Yau said in Cantonese, adding that options were limited. “It’s basically just manual labour jobs.”
As these types of jobs typically offer lower salaries, Yau added that not having a bank account could hold former protesters back financially. They would also face difficulty if told to provide a bank statement for applications such as government welfare, public housing or other schemes that require means testing.
Another prisoners’ rights activist who asked not to be named said that over the past six months, they had heard of three people who had their bank accounts abruptly closed.
“They received a notice from the bank saying they cannot offer them services anymore,” they said in Cantonese.
People in Hong Kong without bank accounts are marginalised, the activist said, adding: “a normal person should have a bank account.”
“If you don’t have a bank account, people will think you are strange, that something has happened to you,” they said.
The activist added that some “yellow shops” – businesses that identify with the pro-democracy movement – had provided employment opportunities to former protesters imprisoned over their activities and were willing to pay them in cash.
‘Illegal activities’
This is not the first time that banks in Hong Kong have reportedly sanctioned individuals associated with the city’s pro-democracy movement.
Last year, HSBC closed three bank accounts held by the League of Social Democrats (LSD), one of the city’s last remaining opposition groups. HSBC, Hang Seng Bank and the Bank of China also closed the personal accounts of some of the LSD’s members which were used for party-related matters, the LSD said.
Like Chan and W, HSBC did not tell the party why it was cancelling the accounts. Chan Po-ying, LSD chairperson, accused the bank of “ignoring its social responsibility for the sake of its business in China.”
According to the Hong Kong Monetary Authority-endorsed Code of Banking Practice, banks “should provide customers with the reason for closing their account.”
The code adds: “This will not apply in exceptional circumstances, for example, where the account is being used, or is suspected of being used, for illegal activities.”
Under Hong Kong law, police can demand banks to freeze accounts suspected of being implicated in criminal activity without first being issued a court order. However, there is no formal mechanism through which police can instruct a bank to cancel an individual’s account.
W said the banks’ actions left him feeling helpless. After his accounts at four banks were closed, he was afraid that he would not be able to open accounts at other banks, adding that his current credit limit was significantly lower than he had been allowed before his arrest. He said he had heard of former 2019 protesters who until now had not been able to open a bank account.
The former protester said that he felt frustrated that the banks had not told him why his accounts were cancelled, or what it would take to reopen them.
“As an international financial centre, Hong Kong’s rules should be above board,” he told HKFP. “From the moment I was arrested to being released and dealing with these matters, things have felt like a black-box operation.”
“I never thought that after pleading guilty and serving time, the oppression… could continue,” he added.
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