UK Edition
One of Britain's most powerful investors has hit out at HSBC and Standard Chartered for backing an authoritarian crackdown in Hong Kong.
In a major intervention, Aviva Investors said it was deeply concerned that the London-listed banks have thrown their weight behind China's Communist regime amid the push for a new law criminalising anti-government movements in the former British colony.
The firm's decision to make its concerns public comes amid a growing outcry over the law - and could prompt other shareholders to follow suit.
Human rights campaigners, pro-democracy protesters in Hong Kong and the US and British governments have already accused Beiing of violating its obligations to the territory.
Aviva's investment chief David Cumming said: "We are uneasy at the decisions of HSBC and Standard Chartered to publicly support the proposed new national security law in Hong Kong without knowing the details of the law or how it will operate in practice.
"If companies make political statements, they must accept the corporate responsibilities that follow.
"Consequently, we expect both companies to confirm that they will also speak out publicly if there are any future abuses of democratic freedoms connected to this law.”
It is rare for City investors to make their feelings widely known on such a contentious issue, with disputes normally resolved behind closed doors. Investors have so far stayed silent on Hong Kong.
Aviva's last major public intervention came two years ago, when it helped spearhead a successful campaign against Marmite and Persil owner Unilever's plans to relocate to the Netherlands.
Mr Cumming was among the first to raise concerns about the deal, prompting other major investors to follow in speaking out. Aviva looks after around £350bn of savers' money.
HSBC shares closed 3.6pc lower in London and Stanchart dropped 3.8pc.
The two lenders backed the security law days after Leung Chun-ying, Hong Kong’s pro-Beijing former leader, demanded that HSBC state its position on the matter.
He said its privileges in Hong Kong “should not be taken for granted” and warned that HSBC could “be replaced by banks from China or other countries overnight”.
Chris Patten, the last British governor of Hong Kong, accused China of using "mafia"-style tactics to bully British banks into line and said it was unthinkable to imagine the same approach in the UK.
HSBC has also waded further into tensions between Britain and China by warning Downing Street against a ban on the equipment maker Huawei in 5G telecoms networks.
The bank is understood to have claimed that it could face reprisals in China if Huawei was blocked from selling equipment to the next generation of networks being built by UK mobile operator.
HSBC relies on Hong Kong and mainland China for about 80pc of its profits, but a majority of its investors are based in the US and UK. Aviva is the bank's 12th largest shareholder, with 134m shares worth £536m.
It is the tenth biggest investor in Standard Chartered, with 53m shares worth £234m.
HSBC declined to comment.