Up to seven years in prison for Hong Kong bankers doing business with Jimmy Lai

Secretary for Security John Lee warns Citibank and HSBC, where the pro-democracy media mogul has bank accounts. Hong Kong police recently froze US$ 64 million in assets that belong to Lai. Hong Kong’s national security law might drive away foreign investors.

Hong Kong (AsiaNews) – Hong Kong’s Secretary for Security John Lee wrote to the Hong Kong branches of Citibank and HSBC, telling them not to deal with Jimmy Lai's bank accounts; otherwise, their top officials could be jailed, Reuters reported today.

The news agency said that it viewed the letters sent to the pro-democracy media mogul and local branches of HSBC and Citibank.

Lai has been in prison for months over his participation in two unauthorised demonstrations in August 2019 and is on trial for threatening national security.

The bank ban covers disposal or conversion, using Lai’s assets as collateral or transferring them in or out of Hong Kong.

Citibank noted that the it is required to comply with all applicable laws in the countries where it operates, whilst  HSBC has not yet commented.

Lee's office informed Lai and the two banks after Hong Kong’s police used the national security law to freeze HK$ 500 million (US$ 64 million) in assets belonging to Lai on 14 May, including his 70 per cent share of Next Digital.

Prosecutors accuse Lai of illegally subletting some public space destined for his financial holding company, which owns the anti-establishment Apple Daily newspaper.

This is the first time that local authorities have used the security law to target a publicly traded group.

Observers note that if Lai cannot move funds held in other countries to Hong Kong, Next Digital's activities are in danger. Yesterday the group said that without new financial injections it has enough capital to operate 18 months.

According to private bankers and corporate law lawyers in the former British colony, the use of the security law to sanction top banking and financial institutions risks discouraging foreign investment.

The Lai case is undermining investor confidence, forcing many to diversify their risks by placing their wealth elsewhere than in Hong Kong.