Hong Kong threatens bankers with prison sentences for Lai accounts News Bank

According to letters seen by Bloomberg News, HSBC and Citi will “impose a fine and a seven-year prison sentence” for violating the directive.

Hong Kong authorities sent them letters threatening the bank of media mogul Jimmy Lai, who was sentenced to up to seven years in prison for dealing with one of his city accounts.

Security Secretary John Lee, who signed the letters seen by Bloomberg News, previously reported that he was freezing bank accounts linked to the city’s Apple Daily newspaper in favor of democracy in accordance with Hong Kong’s national security law. Letters from HSBC Holdings Plc and Citigroup Inc. they were sent to the company earlier this month.

Bankers who ignore the directive “will face a fine in the prosecution and a seven-year prison sentence,” according to the letters.

“I am harnessing power because Lai has been charged with two crimes of cooperating with other countries or outside forces to endanger national security,” Lee told the media on Thursday. “It is my duty to specify in the notification to the relevant parties what the consequences will be if they do not comply with my order.”

A Citigroup spokesperson said in an email that he does not comment on individual accounts and must comply with all applicable laws and regulations in the markets in which he operates. An HSBC spokesman declined to comment.

The letters could frighten investors in the Asian financial center at a time when Beijing is tightening its grip on the city. More than 40% of the members surveyed by the local American Chamber of Commerce said they could leave Hong Kong, highlighting their concern about security law and the government’s strict policies related to Covid-19.

Lai, drink Next Digital Ltd. a prominent democracy activist who used media properties to support the 2019 protests against China, is in jail for attending unauthorized rallies in Hong Kong. He also faces more serious charges under the security law, including “cooperation” with foreign forces.

Lai’s financial adviser said the amount of money in the accounts was relatively small, but Hong Kong represented the end of a network of international banking relationships linked to its private wealth, Reuters said reported the existence of the letters.