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Hong Kong security chief threatens tycoon Lai’s bankers with jail if they deal in his accounts

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Hong Kong’s security chief sent letters to media tycoon Jimmy Lai and branches of HSBC and Citibank this month threatening up to seven years’ jail for any dealings with the billionaire’s accounts in the city, according to documents seen by Reuters.

The letters, signed by Secretary for Security John Lee, were sent to Lai after the Hong Kong authorities announced the freezing of his majority stake in publisher Next Digital and local accounts of three companies owned by him under a sweeping new national security law.

One of Lai’s financial advisers said that while the amount of funds in the accounts was relatively small, they represented the Hong Kong management end of a global network of banking relationships covering his private wealth.

Three senior private bankers and three corporate lawyers – independent from Lai’s accounts – said the action extended the tightening national security apparatus into elite tiers of the banking system for the first time, exposing risks for clients and top financial managers in Hong Kong.

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The advisers are seeking guidance from bankers and lawyers on how to challenge the freeze, and its impact on offshore holdings and banking relationships managed through Hong Kong until now.

The action by the security secretary is also fuelling concern about the broader investment climate in the city given the potential reach of the security law, imposed on the former British colony last June by China’s parliament, lawyers, bankers and diplomats say.

The moves could imperil any attempt by the democracy activist to move offshore assets back home to prop up Next’s troubled Apple Daily tabloid, a staunch government critic, the financial adviser said.

Shares in Next Digital rose as much as 330% as they resumed trading on Thursday after authorities last week froze Lai’s 71.26% stake, then worth $45 million.

Lai has emerged as one of the highest profile targets of the new law and is facing three national security charges including allegedly colluding with a foreign country.

The letter to Lai, sent to him at the city’s high-security Stanley Prison, threatens up to seven years’ jail and an unspecified fine for any dealing in the named assets, including disposal or conversion, using them as collateral or transferring them in or out of Hong Kong.

The letter to Lai lists seven Hong Kong accounts that are linked to three companies registered in the British Virgin Islands (BVI).

Lai could not be reached for comment.

Described as “Notice No. 1”, the letter states that the action is taken under the “implementation rules” of Article 43 of the law, which allows for the seizure or freezing of property “used or intended to be used” for the commission of an offence.

The letters also acknowledge the right of Lai and the banks to challenge the notice, which expires in May 2023, in court.

The same language was used in letters to HSBC and Citibank, according to the documents seen by Reuters.

A Security Bureau spokesman said as judicial proceedings were going on “it is not appropriate for us to disclose operational details”.

“Suffice to say, endangering national security is a very serious crime.”

Banking regulator, the Hong Kong Monetary Authority (HKMA), said banks had to cooperate with law enforcement agencies in criminal investigations, including freezing of assets under relevant laws, which includes the national security law.

“The HKMA has no role in criminal investigations and we are not in a position to comment,” it said.

‘WAKE-UP CALL’

The letter to Lai specified that he would be held liable if he dealt with the assets “except under the authority of a licence” granted by Security Secretary Lee.

The letters to the two banks did not make clear which employees in the bank would be held liable.

A Hong Kong-based spokesperson for Citibank said the bank did not comment on individual client accounts. “Citi is required to comply with all applicable laws and regulations in markets where we operate,” the spokesperson said. A spokeswoman at HSBC in Hong Kong declined to comment.

An account in OCBC Wing Hang Bank is also listed in the letter sent to Lai but it is not known if that bank received a similar notice. OCBC Wing Hang declined to comment.

Lai told Reuters last May that, given the pressure building on him, the bulk of his personal wealth was off-shore.

His advisers say this is spread across Asia and North America, including property in Taiwan, hotels in Canada and tens of millions in U.S. stocks.

“We are certain they are determined to choke Apple, and even without trying to seize assets offshore, they are making it difficult to move that money back into Hong Kong,” one adviser told Reuters.

“We can now see that any banking relationship you have centred on Hong Kong makes you vulnerable under the national security law – that is going to be a big wake-up call for the wealth management industry here, and their rich clients,” the adviser said.

“In trying to nail Jimmy Lai and Apple to the wall, they might well be nailing that industry too.”

Lai’s advisers fear the uncertainty surrounding his offshore assets stems from the fact that they are held in offshore accounts set up and managed through Hong Kong.

Bankers and lawyers say regulators and banks in other jurisdictions are not obliged to respond to demands related to individual accounts from another country, especially if those requests are not linked to terrorism or money laundering charges.

One senior private banker in Hong Kong said it was a common practice for Hong Kong-based private bankers to set up overseas accounts for clients – operating under a key assumption that such offshoring of wealth would be legally firewalled.

“It doesn’t matter if the accounts are set up in Hong Kong. The money is somewhere else, and falls under another jurisdiction,” the banker told Reuters. “It’s secure.”

If, however, confidence in this arrangement were undermined by the national security law and discretionary curbs on monetary outflows, it could hurt the industry.

“A lot of clients have already been spreading their eggs,” said the banker who declined to be named given the sensitivity of the issue. “The No. 1 one destination is Singapore.”

The 73-year-old Lai is serving a 14-month prison sentence for taking part in unauthorised assemblies during anti-government protests that rocked Hong Kong in 2019.

As those protests built, Lai’s representatives moved assets offshore via Hong Kong bank branches to seek protection against a proposed extradition bill that fuelled the demonstrations.

While the government later shelved the bill, its key features – including the ability to render Hong Kong suspects for trial in mainland Chinese courts and broader asset seizure regulations – were included in the security law imposed by China’s highest legislative body.

Lee, the security secretary, said last week that the move against Lai was meant to prevent further crimes and wasn’t aimed at media work.

Hong Kong’s leader Carrie Lam said the action would hopefully reinforce the city’s status as a financial hub “so that no-one can use our financial system to carry out acts endangering national security”.

Next Digital said in a statement on Wednesday it had enough working capital to operate for at least 18 months from April 1 without new loans or cash injections from Lai.

 

(Reporting By Greg Torode, James Pomfret and Sumeet Chatterjee in Hong Kong; Additional reporting by Anshuman Daga in Singapore; Editing by Robert Birsel)

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Alberta's population surges by record-setting 202,000 people: Here's where they all came from – CBC.ca

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Alberta smashed population-growth records in the past year, mainly due to people moving to the province from across Canada and around the world.

The province’s population surged to just over 4.8 million as of Jan. 1, according to new estimates released Wednesday by Statistics Canada.

That’s an increase of 202,324 residents compared with a year earlier, which marks — by far — the largest annual increase on record.

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Alberta also broke a national record in 2023 for interprovincial migration, with a net gain of 55,107 people.

“This was the largest gain in interprovincial migration nationally since comparable data became available in 1972,” Statistics Canada said in a release.


Most of the interprovincial migrants came from Ontario and British Columbia.

Statistics Canada estimates that 38,236 Ontarians moved to Alberta last year, versus 14,860 Albertans who moved to Ontario, for a net gain of 23,376 people.

Similarly, an estimated 37,650 British Columbians moved to Alberta, compared to 22,400 Albertans who moved to B.C., for a net gain of 15,250.


All told, interprovincial migration accounted for 27 per cent of Alberta’s population growth over the past year.

That put it just ahead of permanent immigration, which accounted for 26 per cent, and well ahead of natural population increase (more births than deaths), which accounted for eight per cent.

The largest component, however, was temporary international migration.

Non-permanent residents from other countries accounted for 39 per cent of the province’s population growth in the past year, reflecting a national trend.


Canada’s population reached 40,769,890 on Jan. 1, according to Statistics Canada estimates, which is up 3.2 per cent from a year ago.

“Most of Canada’s 3.2-per-cent population growth rate stemmed from temporary immigration in 2023,” Statistics Canada noted.

“Without temporary immigration, that is, relying solely on permanent immigration and natural increase (births minus deaths), Canada’s population growth would have been almost three times less (1.2 per cent).”

Alberta’s population, meanwhile, grew by 4.4 per cent year-over-year.

Alberta now represents 11.8 per cent of the country’s population, its largest proportion on record. 

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Why Canada's record population growth is helping – and hurting – the economy – CTV News

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Canada has recorded the fastest population growth in 66 years, increasing by 1.3 million people, or 3.2 per cent, in 2023, according to a new report from Statistics Canada.

The country has not seen such growth since 1957, when the spike was attributed to the baby boom and an influx of immigrants fleeing Hungary.

The vast majority of Canada’s growth last year was due to immigration, with temporary residents — which includes foreign workers and international students — making up the largest proportion of newcomers.

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“We need people coming to Canada to help with our economy,” says Matti Siemiatycki, a professor of planning at the University of Toronto. “There are many jobs and professions where there are vacancies, and that is having an impact, whether in the healthcare sector or trades and construction sector.”

Siemiatycki adds immigrants also bring “ingenuity… resources… and culture” to Canada.

Newcomers are relied on to help keep pace with Canada’s aging population and declining fertility rates, but the influx also presents a challenge for a country struggling to build the homes and infrastructure needed for immigrants.

“It’s an incredibly large shock for the economic system to absorb because of just the sheer number of people coming into the country in a short period of time,” says Robert Kavcic. a senior economist and director with BMO Capital Markets.

“The reality is population can grow extremely fast, but the supply side of the economy like housing and service infrastructure, think health care and schools, can only catch up at a really gradual pace,” Kavcic says. “So there is a mismatch right now.”

The impact of that mismatch can most acutely be seen in the cost of rent, services and housing.

In December, Kavcic wrote in a note that Canada needs to build 170,000 new housing units every three months to keep up with population growth, noting the industry is struggling to complete 220,000 units in a full year.

To address this, Ottawa has announced plans to cap the number of new temporary residents while also reducing the number of international student visas, a move economists say could offer some relief when it comes to housing and the cost of living.

“The arithmetic on the caps actual works relatively well because it would take us back down to 1 per cent population growth which we have been used to over the last decade and which is more or less absorbable by the economy,” Kavcic says. “The question is whether or not we see policy makers follow through and hit those numbers.”

Economists believe these changes could help ease inflationary pressures and may make a Bank of Canada rate cut more likely, but could also lead to slower GDP growth.

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Canada’s population hits 41M months after breaking 40M threshold – Global News

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Nine months after reaching a population of 40 million, Canada has cracked a new threshold.

As of Wednesday morning, it’s estimated 41 million people now call the country home, according to Statistics Canada’s live population tracker.

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The speed at which Canada’s population is growing was also reflected in new data released Wednesday by the federal agency: between Jan. 1 2023 and Jan. 1 2024, Canada added 1,271,872 inhabitants, a 3.2 per cent growth rate — the highest since 1957.

Most of Canada’s 3.2 per cent population growth rate stemmed from temporary immigration. Without it, Canada’s population growth would have been 1.2 per cent, Statistics Canada said.


Click to play video: 'Business News: Job growth fails to keep pace with population'

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Business News: Job growth fails to keep pace with population


From Oct. 1 to Dec. 31, 2023, Canada’s population increased by 241,494 people (0.6 per cent), the highest rate of growth in a fourth quarter since 1956.

Usha George, a professor at the Toronto Metropolitan Centre for Immigration and Settlement at Toronto Metropolitan University, told Global News in June a booming population can benefit the economy.

“It is not the bodies we are bringing in; these are bodies that fill in the empty spaces in the labour market,” she said.

“They bring a very-high level of skills.”


Click to play video: 'Canadian millennials surpass baby boomers as dominant generation: StatCan'

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Canadian millennials surpass baby boomers as dominant generation: StatCan


However, Ottawa has recently sought to ease the flow of temporary immigration in a bid to ease cost-of-living woes.


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Immigration Minister Marc Miller said on March 21 Ottawa would set targets for temporary residents allowed into Canada to ensure “sustainable” growth in the number of temporary residents entering the nation.

The next day, BMO economist Robert Kavcic in a note to clients the new limits will have a positive impact on Canada’s rental market and overall housing crisis.

“We’ve been firm in our argument that Canada has had an excess demand problem in housing, and this is maybe the clearest example,” Kavcic said.

“Non-permanent resident inflows, on net, have swelled to about 800K in the latest year, with few checks and balances in place, putting tremendous stress on housing supply and infrastructure.”

Alberta gains, Ontario loses: A look at Canadian migration in 2023

If Alberta is truly calling, then it appears more Canadians are choosing to answer.

Putting the pun on the provincial government’s attraction campaign aside, Canada’s wild rose country saw the largest net gain in interprovincial migration in 2023, Statistics Canada said in Wednesday’s report.


Click to play video: 'Is Alberta ready for population growth?'

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Is Alberta ready for population growth?


The agency said 55,107 Canadians moved to Alberta last year, which was the largest gain in interprovincial migration nationally since comparable data become available in 1972.

“Alberta has been recording gains in population from interprovincial migration since 2022, a reverse of the trend seen from 2016 to 2021, when more people left the province than arrived from other parts of Canada,” Statistics Canada said.

“Approximately 333,000 Canadians moved from one province or territory to another in 2023, the second-highest number recorded since the 1990s and the third straight year that interprovincial migration topped 300,000.”

Meanwhile, British Columbia had 8,624 more residents move out than in in 2023, meaning net interprovincial migration was negative for the first time since 2012, Statistics Canada said.

In general, the largest migration flows for British Columbia and Alberta are with each other, and most of the net loss from British Columbia in 2023 was to Alberta, it added.


Click to play video: '‘Enormous pressure’ expected in Ontario home care due to high growth of senior population'

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‘Enormous pressure’ expected in Ontario home care due to high growth of senior population


It also seems that good things may no longer be growing in Ontario; Canada’s most populous province lost 36,197 people to other regions in 2023, the biggest regional loss in 2023, Statistics Canada said.

That followed a loss of 38,816 people in 2022; the only other times a province has lost more than 35,000 people due to migration to other parts of Canada occurred in Quebec in 1977 and 1978.

Alberta aside, net interprovincial migration was also up in Nova Scotia (+6,169 people), New Brunswick (+4,790) and Prince Edward Island (+818), although all three Maritime provinces gained fewer interprovincial migrants in 2023 than in the two previous years, Statistics Canada said.

— with files from Uday Rana and Sean Previl

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