A Hong Kong pastor tried to protect democracy activists. Now his bank account is frozen


Pro-democracy protesters in Hong Kong shout slogans outside police headquarters in June 2019. (Anthony Kwan/Getty Images)

During the height of the Hong Kong protests last year, Pastor Roy Chan led a ragtag group of middle-aged and elderly volunteers who showed up at pro-democracy demonstrations wearing yellow vests with Chinese characters on the back that read, “Protect them Children .”

They formed human chains to try to stop police from reaching the teenage and college-age protesters, shouting, “Beat us, don’t hit the kids!”

Once in a while, obliged to the authorities. Many of the volunteers, including an 83-year-old named Uncle Wong, were tear gas and pepper sprayed.

Chan and his church say they are now paying a price for this activism.

Last week, while in the UK, the 39-year-old pastor went online to discover bank accounts belonging to him, his wife and the Good Neighbor North District Church had been frozen. The next day, he learned that police had searched the church’s two locations and arrested a staff member and a former director.

Chan and his wife are accused of fraud and money laundering for failing to report millions in church donations – allegations he denies.

“We are a registered non-profit organization. We did everything lawfully,” said Chan, who lives indefinitely in an undisclosed location in the UK with his wife and three young daughters.

The frozen accounts at HSBC Bank were discovered a day after Hong Kong’s new National Security Police confirmed they had ordered the freezing of bank accounts belonging to former pro-democracy MP Ted Hui, his parents and wife. Hui has been accused of misusing crowdfunding donations and is now in his own exile in the UK. He denies the allegations.

Hong Kong activists Joshua Wong (right) and Ivan Lam (left) are escorted to a prison van by correctional officers.

Hong Kong activists Joshua Wong (right) and Ivan Lam are escorted to a prison van by correctional officers. (Kin Cheung/Associated Press)

The actions targeting government opponents’ finances have shaken territory, showing how easily personal assets and multinational banks can be swept up in China’s crackdown on dissent.

Hong Kong’s government denied the moves were politically motivated, but experts said the city’s position as Asia’s leading banking center would be threatened if it became China national security law were seen as a bludgeon for economic coercion.

“The reason this wasn’t done earlier is because China didn’t have the legal tool … to force Hong Kong financial institutions to do things like this,” said Victor Shih, an expert on China’s fiscal policy at UC San Diego. “Now that they have it, they’re starting to do it in a pretty broad way that could easily get broader.”

The accounts freeze comes as Hong Kong’s autonomy from China has been steadily dismantled under a “one country, two systems” framework amid a purge of critics media, government and Education System.

The Hong Kong legislature now has no opposition members after pro-democracy lawmakers resigned en masse last month to protest the disqualification of four colleagues. Prominent pro-democracy activists Joshua Wong, Agnes Chow and Ivan Lam were recently sentenced to between seven months and a year in prison for their roles in last year’s protests.

And last weekend media tycoon Jimmy Lai, a persistent Beijing irritant, was led in handcuffs to a courthouse where he was charged Collusion with foreign powers via Twitter.

Once seen as a haven on China’s doorstep, Hong Kong is now more beholden to the increasing grip of the Chinese Communist Party. It fundamentally changes the city’s relationship with foreign companies, ordinary Hong Kongers planning their future, and the countless numbers of mainland Chinese who have parked their wealth in the former British colony, thinking it was from the authorities across the border isolated.

“My friends in the UK advised everyone to move their money out of Hong Kong,” said Simon Lee, co-director of the International Business and Chinese Enterprise Program at the Chinese University of Hong Kong. “In terms of asset safety, Hong Kong is now no different from China.”

Nonetheless, Hong Kong plays an important role as a conduit for capital to and from China. As long as the Chinese yuan is not freely exchanged abroad, China needs Hong Kong as a clearing house for foreign currencies. The city also has one of the largest stock exchanges in the world.

But geopolitical tensions are rattling the territory’s financial institutions. The US has imposed sanctions on more than a dozen Chinese officials, including Hong Kong leader Carrie Lam, for their role in attacking Chinese territory’s autonomy. Lam said she no longer has access to banking services and has to hoard cash at home.

The US can apply such pressure because the dollar remains the world’s reserve currency and no bank — not even the state-owned Chinese ones — can afford to be cut off. The US also has considerable influence over the network system required to transfer money around the world, known as SWIFT.

Media tycoon Jimmy Lai is the most prominent person to be charged under Hong Kong's National Security Law.

Media tycoon Jimmy Lai is the most prominent person to have been charged under Hong Kong’s national security law since it was introduced in June. (Associated Press)

In between are multinational banks, tied to the US-dominated financial system but unable to anger an increasingly antagonistic Beijing because of the size of the Chinese market.

Few firms illustrate this dilemma better than HSBC, the British banking giant founded in Hong Kong in 1865 by Scottish trader Thomas Sutherland after the Second Opium War.

Although the company is headquartered in London, most of the bank’s business takes place in Hong Kong and mainland China.

The bank that still operates its Hong Kong branches from theirs Tower designed by Norman Foster overlooking Victoria Harbour, has been criticized in China for collaborating with US investigators to indict Meng Wanzhou, Huawei’s chief financial officer. It was later pilloried in Hong Kong by pro-Beijing figures for failing to support the national security law early on.

When its top executive in Asia signed a petition supporting the law in June, the bank became the target of protesters, who destroyed some HSBC branches and defaced the two distinctive lion statues that guard its headquarters.

Then this month came the revelation that some of the frozen accounts linked to Chan and Hui were with HSBC.

This sparked outrage among pro-democracy supporters, who accused the bank of bowing to Beijing’s will.

“This incident is of a serious nature and affects the trust of not only my family’s assets but all HSBC customers in Hong Kong and the world,” Hui wrote a Facebook post. “Under the National Security Act, how much [are] the banks and business are willing to make sacrifices to serve the regime?”

HSBC said it could not comment on individual cases.

Lee of the Chinese University of Hong Kong said the bank must comply with the provisions of the national security law.

“The definition of illegal activity is quite broad now,” Lee said. “If a person makes a donation to an organization’s bank account and that person is found to be involved in illegal activities under the national security law, the bank in question is liable.”

If a dissident with a frozen account were to challenge a bank like HSBC, it could spark a confrontation over whether Western or Chinese laws would apply in dueling jurisdictions.

Hong Kong chief executive Carrie Lam said she was barred from accessing banks because of US sanctions.

Hong Kong chief executive Carrie Lam said she was barred from accessing banks because of US sanctions. (Vincent Yu / Associated Press)

“It’s just a matter of time,” said Shih of UC San Diego. “If both sides decide to use financial sanctions as a tool of statecraft, you will inevitably have lawsuits. You will have a clash of legal provisions from different countries.”

Chan, the pastor, said he was considering filing a case in a British court, although he was dealing with more immediate concerns like feeding his family after losing access to his bank.

Chan, a former social worker who found young members of the triad gang at religious counseling, said the bank’s action would have a chilling effect on Hong Kong’s churches, many of which are brimming with donations in a wealthy city.

The Good Neighbor North District Church, which also operated homeless shelters, was targeted for distributing food and providing medical supplies during the protests and providing shelter for youth who fled their homes after falling out with their parents about the had argued politics, Chan said.

He is unsure if he will ever be able to return to Hong Kong. Uncle Wong urges Chan to stay in Britain. But Chan worries for his mother’s safety because of his legal troubles. (He was vague about how lucky he was to be planning a sabbatical in Europe just before the police raid.)

Chan hopes HSBC will eventually release its funds, but has little regret banking with the firm, which has more than 5 million customers in a city of 7.5 million people.

“I’m a Hong Kong native, of course I use HSBC,” he said. “There isn’t much choice. I trusted them but they are political and trying to work with the system. It’s disappointing.”

This story originally appeared in Los Angeles Times.

Previous Property tax deadlines have been pushed back, but lenders want cash
Next Congress seals deal on $900 billion Covid relief bill