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Bank account freezes in Hong Kong rekindle worries about asset safety

HONG KONG, Dec 8 (Reuters) - Some Hong Kong residents are starting to shift part of their local savings overseas after police recently froze the bank accounts of a few people linked to pro-democracy protests, rekindling asset safety concerns, bankers and lawyers said.

The police asked banks to freeze the accounts of veteran activist Ted Hui and his family members last week, while the account of a local church was also blocked this week, all on suspicion of money laundering. The cases involved bank accounts at HSBC, among others.

The actions, while still limited, have triggered concerns that asset freezing could be used more widely against Beijing opponents in Hong Kong to crack down on dissent, the people said.

Jimmy Chung, who works in retail planning, opened a bank account in Switzerland in June, around the time the government passed the national security law. The 40-year old had transferred thousands of dollars worth of his savings by July and is now considering moving more offshore.

“I never thought things would be evolving this fast, so I have to make more contingency plans,” said Chung, referring to the recent bank account freezes. Chung has no ties to political activists in Hong Kong.

Two senior bankers said some of their clients, who opened offshore accounts last year when pro-democracy protests rocked the city, have started the process of moving funds.

“The people who were sitting on the fence are starting to take action now,” one of them said. “They are worried that this (account freezing) could become more widespread and they have a lot to lose if all their savings are in Hong Kong.”

Another banker with an European wealth manager said some of the bank’s clients were converting assets denominated in local currency into U.S. dollars as they prepared to move them offshore. The clients had no involvement in the protests.

All the bankers spoke on condition of anonymity.

Despite last year’s violent protests in Hong Kong and the imposition of the security law, the city has not seen large capital outflows so far. Instead, it has benefited from inflows tied to a large number of public offering of shares.

Responding to criticism that freezing the account of ex-lawmaker Ted Hui would hurt the financial image of Hong Kong, city leader Carrie Lam said the local financial and monetary systems remained robust.

Hui has fled to Britain after facing criminal charges related to anti-government protests last year.

The Hong Kong Monetary Authority told Reuters that the freezing of funds or property related to criminal investigations was carried out by law enforcement agencies and banks were expected to cooperate.

In another case, the Good Neighbour North District Church, whose volunteers provided “humanitarian aid” to protesters last year, said in a Facebook post that its HSBC account had been frozen as an “act of political retaliation”.

Local media said the action came after the police suspected the account was linked to money laundering.

While the Hong Kong police did not respond to a request for comment on the church incident, HSBC said it was unable to comment on matters related to specific accounts.

“While the law enforcement agencies have the powers to get bank accounts frozen if they are probing money laundering or crime proceeds, the main concern here is if this is being used more loosely,” said a lawyer who advises wealthy individuals.

“That’s a disconcerting thing, and, therefore, people are now asking what would be the best alternative for them to safely park their assets.” (Reporting by Sumeet Chatterjee and Clare Jim; Editing by Ana Nicolaci da Costa)

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