Hong Kong achieved its status as an international finance center because it had a trustworthy banking system. After the anti-ELAB movement last year, the Extradition Bill has already put many business people off from investing in Hong Kong, as this ambiguous bill would hit business freedom. Who would have thought after the Extradition Bill being withdrawn came the worse environment? Is the banking system nowadays safe? I am not so sure.

A few days ago, the police requested the banks to freeze the bank accounts of Ted Hui and his family members as Hui has allegedly violated the national security law. But the accounts were unfrozen then refrozen within 24 hours. Such an act has greatly reduced the stability of the Hong Kong banking system. Hong Kong being able to be an international finance center and the south gate of China’s export and import, a lot of credit should be given to a stable banking system. I, as a businessperson, can use Hong Kong as a base without worry and discuss business opportunities with different countries because Hong Kong has a safe and stable banking system. If it is no longer safe and our accounts can be frozen at any time by the government, who would want to invest and do business here?

In this incident, the police used national security law as the reason to freeze Hui’s and his family members’ bank accounts. On the surface, it does not seem to affect the stability of the banking system. I also do not want to speculate whether their motive has any political element. What I want to highlight is that the banks have frozen the clients’ accounts twice within 24 hours without a legitimate reason. This has definitely massively hit Hong Kong’s position as a finance center, especially since the banks involved are international banks with networks stretched across the world. I feel that these banks should have much stricter procedures, and not freezing and unfreezing accounts whenever they want. It would only make more international investors look away from Hong Kong. By then, we would have to “embrace the Great Bay area,” as Carrie Lam said.

In fact, Hong Kong currently already has sufficient supervision over the sources of business funding, and there are related regulations for the banks to adhere to, such as the Banking Ordinance and Anti-Money Laundering and Counter-Terrorist Financing Ordinance. Also, company secretaries, accounts, and audits must be monitored by government departments. That means Hong Kong has sufficient channels and procedures to deal with funds with unknown sources and does not need to freeze bank accounts just like that. Besides, every businessperson who wants to open a company account must go through a strict approval procedure such as a company register check. If the bank would so easily freeze a client’s account, businesspersons would only lose confidence and think they could be the next victim.

It is understandable if freezing a bank account is a way to combat money laundering crime. But the bank has the responsibility to publish a clear guideline and the whole implementation procedures to clear the doubts of the public. If the public has lost confidence in the hard-earning banking system, Hong Kong would certainly lose its status as the international center. Hong Kong’s small and medium enterprises have already been in huge difficulty in the past year due to the pandemic. Many industries have not harbored much hope of getting government subsidies and rather work extra hard to rescue themselves. But if even the remaining stable banking system has been destroyed, it will be the ringing of the alarm bell for the business people.

(Matthew Wan, Executive Committee Member of the Civic Party)

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