BUSINESS HSBC’s frozen account scandal arouses suspicion about bank’s management

BUSINESS

HSBC’s frozen account scandal arouses suspicion about bank’s management

Global Times

21:30, October 24, 2020

Photo: VCG

A leaked report about HSBC’s action of putting a large amount of customer cash in frozen account without carefully tracking down the owners aroused debate among financial experts about the bank’s internal management, after the British company’s business in the Chinese market was entangled in controversies following its alleged collusion with the US to trap Huawei.

According to a recent Guardian report, HSBC has put 1.5 billion pounds ($1.96 billion) of its customers’ cash out of reach in frozen accounts, citing an internal report.

The report said that the bank had been warned by compliance staff more than three years ago that it should try to reunite customers with the cash, but HSBC made little effort to track down the owners of the accounts including those who were easily traceable.

The bank’s policies were potentially harming customers, including elderly and vulnerable savers who may have lost track of their money, the report said. Around 100,000 dormant accounts reportedly held deposits worth more than £1,000.

The exposure, along with earlier scandals that HSBC had been involved in, aroused doubts among experts about the bank’s internal management.

The HSBC has been earlier accused of being an accomplice of the US government to trap Huawei, resulting in the arrest of the company’s CFO Meng Wanzhou. The incident largely hurt the bank’s reputation in China, although the company denied playing a role in the arrest of Meng.

“Such incidents show that HSBC’s internal management is ‘in chaos’ by repeatedly tramping on the interests of its customers,” Dong Dengxin, director of the Finance and Securities Institute at the Wuhan University of Science and Technology, told the Global Times.


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