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Finance

Chinese state media step up attacks on HSBC over Huawei troubles

Site backed by cabinet office accuses British bank of 'betrayal'

Huawei Technologies Chief Financial Officer Meng Wanzhou leaves her home to attend a court hearing in Vancouver on May 27.   © Reuters

HONG KONG -- China's state media fired a fresh blast at HSBC Holdings on Tuesday over its alleged role in the arrest of Huawei Technologies Chief Financial Officer Meng Wanzhou, despite repeated attempts by the bank to defend its conduct.

"In the political oppression of the U.S. government against Huawei, HSBC is the one that handed out the knife," said a commentary posted on the website China.com.cn, which is backed by the State Council Information Office and the China International Publishing Group.

With lawyers returning to court in Canada this week to argue against Meng's extradition to face allegations of bank fraud and other charges in the U.S., HSBC has been put on the defensive by attacks from the People's Daily, China Global Television Network and other state media platforms.

Over the weekend, HSBC issued a statement on Chinese social media saying that it did not "ensnare" Meng and only provided information to the U.S. Department of Justice when it was compelled to do so.

The U.S. argued that Meng deceived banks including HSBC, prompting the lenders to clear millions of dollars in transactions in violation of sanctions against Iran. Meng's lawyers argued last week that the U.S. misled Canadian authorities by omitting slides from a PowerPoint presentation that she showed to HSBC bankers at a 2013 meeting in Hong Kong which would have proved she was upfront about dealings with Iran.

"HSBC did not 'fabricate' evidence or 'hide' facts," the bank said in its weekend statement. "HSBC would never distort the facts or seek to harm any of our clients for our own gain."

Tuesday's commentary dismissed the bank's defense as "meaningless."

"HSBC framed and betrayed its clients," China.com.cn said. "HSBC has not only smashed its signboard of 'century-old business,' its behavior also nailed itself to the pole of stigma. Shame, shame."

A HSBC spokeswoman in Hong Kong declined to comment on the latest article. Shares in the bank, which earns 40% of its revenue and more than 60% of its profit in Hong Kong and mainland China, dropped 1.6% to a decade low on Tuesday. Shares of the bank, which will report quarterly results on Aug. 3, have fallen in eight of the past 10 sessions in Hong Kong.

The bank is "being made into a political pawn," said Andrew Sullivan, Hong Kong-based director at broker Pearl Bridge Partners. "I think the reality is that companies will increasingly find themselves in the crossfire. HSBC had to answer questions from the U.S. or risk being barred from the U.S. banking system. It's now being accused by the Chinese."

Banks and businesses are being forced to pick sides as tensions mount between the two largest economies. The stakes are particularly high for HSBC, which broke years of pointed neutrality to publicly back Beijing's controversial national security law for Hong Kong in June even before full details of the legislation were disclosed.

"Now, wallowing in degradation and with its reputation at rock bottom, HSBC may struggle to continue to enjoy treatment in China where it can break the pot it eats food from," Tuesday's commentary said.

Meng has been under house arrest in Vancouver since she was detained at the request of U.S. authorities in 2018.

Additional reporting by Nikki Sun.

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