HSBC, Standard Chartered criticized over support for Hong Kong security law

A major shareholder in both HSBC and Standard Chartered has hit out at the banks over their support for China’s controversial new national security law in Hong Kong.

In a rare rebuke, Aviva Investors, a top 20 shareholder in both banks owning almost £800 million ($1.02 billion) of their shares, said on Wednesday it was “uneasy” with their public support for the proposed law, given the lack of detail around how it will operate in practice.

Aviva Investors Chief Investment Officer for Equities, David Cumming, said in a statement: “If companies make political statements, they must accept the corporate responsibilities that follow.

“Consequently, we expect both companies to confirm that they will also speak out publicly if there are any future abuses of democratic freedoms connected to this law.”

Both HSBC and Standard Chartered declined to comment when approached by CNBC on Wednesday.

The controversial law was passed by China’s National People’s Congress on May 28 and met with criticism from around the world. Senior U.S. and U.K. officials have accused Beijing of seeking to clamp down on the freedoms and autonomy of Hong Kong and its people.

Though details of its practical implementation are scarce, Chinese officials have said the bill will target acts of secession, foreign interference and acts of terrorism. It has therefore raised alarm in the aftermath of widespread pro-democracy protests in the special administrative region over the past year.

Both HSBC and Standard Chartered are headquartered in London but make the bulk of their profits in Asia.

Meanwhile, U.S. Secretary of State Mike Pompeo said the signing of a petition supporting the bill by HSBC’s Asia-Pacific CEO, Peter Wong, amounted to a “show of fealty” that would earn little respect in Beijing.

In a statement Tuesday, Pompeo accused HSBC of aiding China’s “coercive bully tactics” against the U.K. and claimed Beijing is using the bank’s business in China as “political leverage” against London.

“The CCP’s browbeating of HSBC, in particular, should serve as a cautionary tale,” Pompeo added.