LettersDid Huawei’s Meng defraud HSBC? Hong Kong’s banking regulator must investigate
- Meng’s fateful meeting with HSBC took place in Hong Kong, between Hong Kong parties. While the case has unleashed a storm elsewhere, why has the Hong Kong Monetary Authority remained silent?
The allegation centres on one key point: did HSBC have prior knowledge of relations between Huawei and Skycom? If so, who at HSBC knew and how much did they know? If HSBC did have prior knowledge of the Huawei-Skycom connection, the fraud case falls apart.
While China, Canada and the US have bared their knuckles in the tussle over Meng, and a wedge has been driven between China’s relations with Canada and the US because of the extradition case, the Hong Kong Monetary Authority – the city’s banking regulator tasked with maintaining monetary and financial stability for Hong Kong as an important international financial centre – has remained eerily quiet about the allegation of financial fraud.
HSBC should, logically, have raised the issue with the HKMA first, given that Meng’s meeting took place in Hong Kong, between Hong Kong parties, under the watchful eyes of Hong Kong regulators and law enforcement agencies. Should the allegation be substantiated, it would damage the integrity of Hong Kong as an international financial centre.
Did HSBC report the allegation to the HKMA, or to the Hong Kong police’s economic crimes division? Did the HKMA or the police initiate any investigation? It appears not. As an important international financial centre, Hong Kong should be vigilant and seek to investigate any allegations of financial fraud, as North American regulators and law enforcement agencies do.
So why the silence, even after evidence has come to light which Meng’s lawyers have argued shows HSBC had prior knowledge of the relations between Huawei and Skycom?
Maintaining financial integrity and enhancing market confidence in Hong Kong require the HKMA to initiate an investigation into the fraud allegation either independently or with the police. Depositions should be taken from HSBC’s senior executives, to get to the bottom of their knowledge of the Huawei-Skycom connections. The HKMA should move fast, to either substantiate or invalidate the allegation.
This is a rare opportunity for Hong Kong to do the right thing and use the rule of law to help bring to a legal and logical end this sensational saga.
Victor Gao, former China policy adviser, Hong Kong Securities and Futures Commission, and chair professor, Soochow University