United Kingdom

Investors in HSBC face backlash over bank's decision to back China

HSBC investors are under fire for their silence over the bank's decision to back controversial laws imposed by China on Hong Kong.

Major shareholders have refused to comment on whether they will be pushing the bank to change its stance, which is at odds with the Government.

HSBC, which is headquartered in London but makes the vast majority of its profit in Asia, this week said it supported laws Beijing is imposing on Hong Kong.

Major  HSBC shareholders have refused to comment on whether they will be pushing the bank to change its stance, after it backed Chinese authorities in Hong Kong 

Critics fear the legislation will restrict freedom in Hong Kong and increase China's power over the territory. 

As the backlash against HSBC intensified, former Conservative leader Sir Iain Duncan Smith said the bank's support for China's national security law was a 'grave error'. 

Asked if he would advise people to shut their HSBC accounts, he added: 'It is up to individuals but, personally, if I was there I would.

'I honestly think that the issue of freedom is more important than any business's worry about a particular individual profit and loss at the bottom line.'

UK investment managers such as Aviva, M&G, Legal & General, Standard Life Aberdeen and Royal London – which look after the pensions and savings of hundreds of thousands of Britons – own a large chunk of HSBC's shares.

But all declined to comment on the situation in Hong Kong, and would not reveal whether they would be lobbying HSBC to change its position.

Peter Parry, policy director at the UK Shareholders' Association, said HSBC is in a very awkward position. But this also puts its shareholders in a sticky situation.

The likes of Aviva, M&G and Royal London have a duty to uphold good governance at the companies they invest in – and many of their customers may be riled if they are seen to be tacitly supporting an erosion of freedoms in Hong Kong.

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