The snows of Hang Seng

Coked up bankers of Hong Kong

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Tessa Thorniley reports from Hong Kong for Danwei on the city's drugged up financial industry.

On a Friday night in Lan Kwai Fong, a 29-year-old stockbroker knocks back a shot of sake and tries to work out how many people in his bank take drugs.

It is a question that has been rippling through the Hong Kong banking community since the death, in June, of Neil McCormick, the 36-year-old head of Asian equity derivatives at UBS on the island.

McCormick had returned to the UK for a wedding when, after snorting cocaine at a friend's home in Holland Park, London, he plunged from the balcony to his death.

While none of his friends suggested that Hong Kong had turned him into a drug user, other bankers who spoke to Danwei on condition of anonymity suggested that cocaine use on the island is ubiquitous.

“What happened to Neil is obviously terribly sad, but it is not that surprising,” says one. “The financial community here is buried in white powder.”

“On the evening of the last day of the 2009 financial year, I know of a team of accountants responsible for calculating traders' profits at a US investment bank in Hong Kong who snorted cocaine at their desks through the night until 9am in order to continue working,” she adds.

After another shot of sake, the young stockbroker, born in Hong Kong but educated in the UK, has his answer. “I would say around 65 per cent of the people who work with me have a recreational drug habit,” he says.

“I would not say they were addicts, and I've never seen them do drugs in the workplace, but at the weekend – sure!”

Having said that, he goes on to talk about how sometimes drugs do leak into the workplace. “You hear some dodgy tales here. A guy from one of the big banks was out here on business recently. He arrived on a Monday and was due to have meetings through till Wednesday and Thursday. But he went out Monday night and no one heard from him again until the following Monday. When he got back to his office in Sydney he was fired.”

Another few shots of booze and the stockbroker is ready to hit the Tazmania Ballroom for a large night out. All around him, expats are cutting loose in spectacular fashion after a long week at work.

“Hong Kong is like London on steroids!” he says. “Look where we are,” he adds, gesturing around the tight network of streets that make up Hong Kong's main bar area. “This is a one-kilometer-square party zone. Everything is just more concentrated here.”

For young expats working in high-pressure and high-rolling jobs, Hong Kong has always been a party town. The majority of the foreign population is male and single, and looking for a good time before returning home to settle down.

As one long-term resident and bar and restaurant owner put it: “There are a lot of single guys here. They are often posted here by their companies, without their families and they like to party and go out chasing women.”

And just as cocaine has become the drug of choice in London and New York, it is now the preferred sharpener of Hong Kong's expat community.

In the past few years, the drug has gone from being relatively rare to being the standard accompaniment at almost any social occasion. A day on a junk with a group of recruitment consultants and financial analysts might kick off with a 'fat line'. A quiet dinner party might be perked up with some nose candy. And out on the streets, Hong Kong is as debauched as any international city.

One recovering cocaine addict, and a Hong Kong resident for the past eight years, sketches out the picture of excess on the island. “About half the guys I've seen in recovery are white-collar workers. I've talked to people who have dropped HK$30,000 in a weekend.

“First they get the cocaine, then the girls, then the jeroboams of champagne, then the hotel suites and so on. We call them the weekend warriors. They start with beers on a Friday night and they don't stop until Sunday evening, even when their families are calling them and asking where they are. Usually they are at work first thing Monday morning though,” he said.

Out on the streets of Central, barmen and the public relations staff at nightclubs even dole out free cocaine to regulars and models, keen to get the party started at the weekend.

“That's the way the clubs work,” says one industry insider. “They dish it out for free because they want the attractive people in there, so that the men will go in and spend money. They give the models coke to get things going.”

“I know guys who hit the clubs, pick up these models and then go back to a suite at the Four Seasons and keep partying all weekend, fuelled by the drugs,” he adds.

The drug deliveries begin on Friday afternoon, according to one petite banking industry insider who recently split up with her hedge-fund manager boyfriend after discovering he was nursing a five-gram-a-week cocaine habit. “Coke dealers in Hong Kong text their customers every Friday afternoon to let them know supplies are in. At the office of one headhunter almost everybody's mobile beeps at exactly the same time,” she said.

In March, the South China Morning Post, the island's English-language newspaper, revealed the existence of “Dial-a-line”, the local taxi service that delivers more than just passengers.

The taxis are used by a network of drug dealers to deliver and sell narcotics to customers who contacted them by phone or text message.

According to the report – which included interviews with the cab service's former customers – news of the operation had spread by word of mouth and business is apparently booming.

One ex-client pointed out that the taxis did not go into Lan Kwai Fong because of police patrols, but added that it was “normally fine” if people were out for the night anywhere else, such as Soho and Hollywood Road in Central.

The banking insider said: “What I've noticed here, compared to London or New York, is the number of middle income earners who take drugs, the accountants, recruiters, research analysts. I think it's partly because they suddenly have a much higher disposable income than they did at home.”

Hong Kong has been quietly developing its cocaine habit since the mid-2000's, with police admitting for the first time, in 2005, that the drug had “increasing popularity” and that there had been “an upsurge of cases”.

The following year the street price of the drug in the city halved as South American smugglers and Hong Kong triads began to flood the island with the drug. It currently retails at around HK$1,000 a gram.

In November last year, the police said cocaine seizures had almost doubled and the amount of ketamine intercepted rose four and half times in the first ten months of 2009.

At the time, Secretary for Security Ambrose Lee Siu-kwong said the figures were higher because there was an abundant supply of drugs and the authorities had stepped up the fight against trafficking this summer.

Then, in April the police accidentally stumbled upon a record stash of 372kg of cocaine (worth an estimated HK$337 million) on the rooftop of a house near the Chinese border.

By international standards, the haul was relatively puny – most record seizures elsewhere are quoted in tons rather than kilograms. But with Hong Kong police focusing their attention on ketamine, the drug of choice for the island's young Chinese partygoers, it is only recently that cocaine has come under closer scrutiny.

And since the authorities are keen to maintain Hong Kong's status as an international financial capital, the police and courts tend not to look too closely at the behavior of the island's expatriates. A spokesman for the police denied this was the case, and said the force would “continue to crackdown on drug trafficking and abuse, regardless of the ethnicity or backgrounds of the persons involved”.

“I think the authorities here don't know what to do. Maybe they are quite naïve about what is really going on?” said one bar owner.

However, a few miles south of Lan Kwai Fong, in an abandoned Aberdeen shipyard now filled with feral dogs and illegally-dumped building materials, sits Wayne's boat.

The former Yau Ma Tei (Kowloon) ferry that once served as a tycoon’s offshore gambling den, is now a haven of calm and sofa-strewn meeting rooms. It is a world apart from the flash, fast-paced rhythm of Central. This is where Hong Kong's partygoers come when they have hit rock-bottom.

Onboard, Dr Wayne Moran runs 1212, pronounced one to 12 in reference to the 12 step treatment program, a center that treats recovering addicts. Joanne Schmitt has worked as one of the center's small team of counselors for the past two-and-a-half years, witnessing the darker side of expatriate life.

Schmitt trained as a counselor at the Hazelden Center in the United States, which has treated the likes of Liza Minnelli, Melanie Griffith and Steve Tyler, the lead singer of Aerosmith. She said most of her patients were from the US, UK or Australia, male, in their mid-40s and married with “very decent” salaries.

“By the time they come to us, they have probably been alcohol or drug users for some time. Addiction tends to start in the teenage years. By the time they get to Hong Kong they will probably already have a problem. But in many cases when they come here it gets worse,” she said.

She adds that cocaine, for example, is “very easy to get hold of” and that it is more common for high achievers – bankers and businessmen – to wind up in the treatment center than those lower down the pay scale.

“If I think of a typical patient, they will probably have come to Hong Kong for work. They are the work hard, play hard type. Perhaps they are also quite athletic and usually very good at what they do. Sometimes they get into alcohol or drugs as a way of letting off steam. Then, perhaps because of the lack of a wide family structure it’s easy to fall into bad habits. Usually only the spouse will know – she’ll be the only one who can see the descent – but by the time it’s a problem she is often already the enemy. Then, there isn’t the support network that people would have back home to catch them,” she said.

She underlined that not all recreational drug users become addicts in need of treatment, but said the increasingly widespread social acceptability of drug use is narrowing the line between the two.

She added that cocaine addicts are not as common at Recovery Works as alcoholics, since there were fewer drug takers who had reached the “fairly desperate state” that drunks get to.

The number of people joining Recovery Works with drug and alcohol problems is not rising, she said, although she adds that during the financial crisis a number of newly unemployed professionals started to attend daytime recovery programs for the first time.

“I think they felt they finally had the time to do something about their problem,” she said.

At Cocaine Anonymous meetings in the city, attendance ranges anywhere from two or three people to ten, suggesting that the numbers of drug takers who hit bottom and get help are relatively few, even if recreational drug use is increasingly common.

And, to put the expatriate population in Hong Kong into context, it accounts for less than five per cent of the island's seven million population, including the large Filipino and Indonesian communities. Strip those out and the figures are only in the tens of thousands.

A former cocaine addict said the number of cases were stable, and that Hong Kong was not out of line with the situation in the West. “Addiction is a disease. If you have it, it doesn't matter where you are – Hong Kong the US, the UK – you'll feed your addiction until you get help. Some people can drink a bit of alcohol then stop when they've had enough. Some people just keep going – they are the addicts. Their environment doesn't make much difference in my experience,” he said.

However, unlike the West, Hong Kong has escaped the financial crisis relatively unscathed and the banking community has cash to burn again. HSBC, which carries out an annual survey of expatriates, noted that in 2010 more than half the 250 participants agreed that their economic conditions had improved, a far higher proportion than their counterparts in London or New York.

The study also reported that Hong Kong expatriates are relatively high earners – with 35% of them earning over US$200,000 – and that 75% of them are earning more since relocating.

In a bid to help employees with problems, several of the US investment banks have imported their Employee Assistance Program (EAP) to Hong Kong.

The system came into being because of America's strict discrimination laws, because it was feared that staff who needed treatment for drug, alcohol or other personal problems could face unfair treatment in the workplace if they sought help.

Through the scheme, a third party confidentially assesses staff in need of treatment and liaises with the bank's Human Resources department, simply informing them that the employee will be absent for a period of time.

“A lot of the banks here have EAPs. US companies spend so much on their employees, they want to ensure they do the best job,” said Schmitt.

“It gives staff a chance to get help if they need it. The company pays the EAP for their services but the EAP isn't part of the company. Sometimes employees get sent there by their bosses though. I think if an employee needed help once or twice the company will be supportive. After that, I'd doubt it. Also this service isn't really provided by any Asian or British or other European companies,” she added.

Human Dynamic, an EAP firm with offices across Asia and partners around the world lists a range of services on its website from tackling poor morale and stress in the workplace to treatment of more serious issues.

The firm which carries the tagline “Happy Employees will generate Happy Customers and Happy Shareholders” declined to comment on whether drug problems among employees are becoming a bigger issue in Hong Kong.

Among the bankers, there is widespread denial that anyone is partying harder now than they were in the 1980s. One former banker, turned recruitment consultant said that more people had “burned out or overdosed” in the 80s, unable to cope with the sudden wealth that the island created.

More than a decade before the colonial lights were switched off by Chris Patten in 1997, the English-speaking expat population in Hong Kong was already predicting the end of swinging Hong Kong.

In a 1986 Sunday Times magazine article entitled 'Jittery City', a variety of long-time residents predicted the demise of the entertainment industry, nudity and girlie bars.

Pat Sephton, described as a Liverpudlian former model who back then ran a Tsim Sha Tsui night club known as Bottoms Up told the newspaper there was “not a chance” that her girlie bar would be allowed to exist after 1997.

“I know they assure us nothing will change. But you remember what happened to Shanghai? You remember Blood Alley and all the girls in the clubs along The Bund? They stayed for a month or two, and then they were forced out. There's no way a communist administrator is going to allow men to ogle at naked girls”.

On the streets of Lan Kwai Fong or Wan Chai today however, it is clear that the party is still in full swing.

Tessa Thorniley, a freelance business and travel writer based in Shanghai. She writes for newspapers, magazines and websites including The Daily Mail, the South China Morning Post, the Guardian, The Daily Telegraph and Wallpaper.

Her previous articles for Danwei are Chinese entrepreneurs in Africa, land of a billion customers, Bankrupt schools and their fleeing foreign bosses and China's private healthcare racket.

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There are currently 24 Comments for Coked up bankers of Hong Kong.

Comments on Coked up bankers of Hong Kong

Yawn.

Bankers / cocaine / hookers / champagne.

How many times has this been rehashed?

What crap, I am working in one of the biggest banks here in HK, i don't know anyone who takes drugs...

Analyst: You're working at the wrong bank.

@analyst just bc you don't know anyone who does drugs, does not necessarily means that people aren't doing any..

Very disappointed in Danwei here. I'm sure there is a large grain of truth, but the stench of sensationalism makes this difficult to swallow. Frankly, this reads like something out of a US local news channel.

hkexpat:

The headline and introductory sentence are perhaps sensationalist (all my doing), but the reporting is all very solid.

Are there other industries in Hong Kong that are as awash with as much coke as banking? Perhaps a Danwei expose on coked up industries of Hong Kong?

First comment dismisses the whole thing as a yawn, totally unsurprised by the idea of finance types nursing a coke habit, while others cry sensational. I thought Snows of Hang Seng was a nice turn of phrase... Jeremy, I wish you could do more pieces like this on HK, and even Taiwan.

The main issue I have with the piece is that the tone is misleading, even if the research was thorough. In the beginning, the article quotes a banker as saying that 65% of his colleagues do drugs, and then does nothing but encourage the reader along that direction. e.g. "the drug has gone from being relatively rare to being the standard accompaniment at almost any social occasion." and the quote about everybody's phones going off at 5 pm on Friday. It seems to cater to people who want a really trashy story...

The reporting is 'solid' simply because anyone irrespective of job can get illegal drugs & hookers in HK (or anywhere else) if they want to and this has been the state of play for scores of years. If you want to spend a lot of money on that then - you can; 'sup t' you.

Was this story something Barclay Crawford left over at SCuMP before he left HK?

Sorry Jeremy, the article pretty much says, caucasian + banker in HK/fin industry = coke. Solid reporting it may be, but it doesn't make the scene that much different than in NYC, London or other large financial centres and hence makes HK seem much more special in that sense then it really is. I think the first comment by Mumph summed it up well. I hear the similar stories from friends at banks in New York, London, Singapore etc.

This story fails to mention the Hong Kong's real scourge: ice-cold beer at 7-11s spaced perfectly so you never have to carry more than a can at a time. Sip on the escalator, walk back down, sip on the escalator - it's a people-watching video game: Super Mario Beer.

Holla, back office!

Last time I went to HK I spent the entire weekend holed up in a wanchai hotel with three filipinas, and an african gal, bags of supplies and a big pipe. Dropped 20,000 HKD and probably a lot more brain cells than that, and it was awesomely good fun! Whoo hoo, you all wish you could roll like that!

ROCKING THE KONG - that sounds like a great idea. I'm going to do that next time I'm in HK on a visa run.

hahaha, you banking guys make me laugh. buying hookers, take some stuff and you think it's all whoo-hoo and hard rolling. oh my god. every weekend cities are full with people doing stuff more exciting than that. and they don't need to pay for girls or spend the week doing a dust boring job. you should go out with a few friends of mine then you would understand how laughable your post is...

Thanks to Danwei for the illuminating article. We've always known about drugs in the financial industry but I've never read an article specifically about HK's scene.

"Solid research" and the reference to Aberdeen being a few miles north of Lan Kwai Fong do not sit well...

Zaisen

Aberdeen is a five mile walk from Lan Kuai Fong and about three miles away from it as the crow flies.

Is three miles not a few miles?

yes Zaisen, three is a few, but Aberdeen isnt NORTH of Lan Kwai Fong, its west.

Sorry, that last post was to Jeremy Goldkorn.

Sorry, its actually south. bit too much coke tonight heh heh heh heh

Ah yes, south is correct, text corrected. John, lay off the snow.

Analyst: the reason none of your colleagues don't take coke is because they are analysts - the one area of banking that needs early starts and research / writing / clarity early in the morning.

Brokerage, trading & particularly client relationship roles is a whole other story though.

I work in HK in finance and yes there is LOTS going on. Try Wyndham any week night.....

No harm in it! (Well maybe there is but never let health get in the way of a good time)

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