HSBC denies colluding with the US to ‘set a trap’ for Huawei

Meng Wanzhou was arrested in Vancouver in 2018 © REUTERS
By Don Weinland in Beijing
HSBC has denied “setting traps to ensnare” Huawei after the bank was dragged into the clash between Washington and Beijing over the global expansion of the Chinese telecommunications group.
In the British-headquartered bank’s first public comments on the controversy, it rejected allegations in Chinese media on Saturday that it tried to entrap Huawei in the act of breaking US sanctions, and that it had presented US authorities with misleading information.
The US has labelled Huawei a national security threat with close links to the Chinese military and has sought to stop the company from building 5G networks around the world.
At the request of the US Department of Justice, Meng Wanzhou, Huawei’s chief financial officer and the daughter of the company’s founder, was arrested in December 2018 in Vancouver, Canada.
She faces extradition to the US on charges of bank and wire fraud. The allegations of US sanctions violations for doing business with Iran date back to 2012.
Ms Meng’s case has become one of many conflicts contributing to the collapse in US-China relations.
HSBC, which responded to a request from the DoJ to provide information on Ms Meng’s alleged sanctions violations, has been thrust into the dispute. It has since become a target for attacks from China’s nationalist state media.
The bank’s Hong Kong-listed shares were down more than 2 per cent on Monday morning, while the broader market was flat.
On Saturday, HSBC posted a message on Chinese social media platform WeChat, insisting it was not involved in the US decision to investigate Huawei or arrest Ms Meng.
The statement, directed at the Chinese public, said: “The timeline of events in the Huawei case makes it absolutely clear that HSBC did not prompt the investigation of Huawei. US government scrutiny of Huawei began long before HSBC Group got caught up in the case in late 2016.”
HSBC said on Sunday that it did not have any additional comment to make.
The bank is one of the largest foreign lenders in China and has an extensive retail and corporate banking business in the country. Although its headquarters are in London, the group makes up to 80 per cent of its profits in Asia.
Since the start of the Huawei controversy, HSBC has continued to work with Chinese government entities such as the finance ministry and China Development Bank, a sign that its relations with Beijing remain intact. It recently backed the harsh national security law that Beijing imposed on Hong Kong.
The Trump administration’s campaign against Huawei led to the UK and Australia banning the company from building their 5G telecoms networks.
Beijing’s dispute with Washington is viewed as one of several flash points that have pushed US-China relations to the lowest point in decades — along with a trade dispute, the security legislation in Hong Kong, alleged human rights abuses in Xinjiang and the origins of the coronavirus outbreak.
State-controlled nationalist tabloid Global Times has long sought to portray HSBC as a culprit in the Meng case. “The response from the lender is nothing but a deathbed struggle,” the paper said at the weekend.
Scrutiny from the Chinese public can prove damaging to foreign banks in the country. Several state-owned companies refused to do business with UBS last year after one of the Swiss bank’s analysts used the phrase “Chinese pigs” in a report on African swine flu — an incident known as “swinegate”. FT