Cathay Pacific replaced its chief executive on Friday after Beijing moved to pull Hong Kong businesses into line over anti-government protests that have plunged the territory into its worst political crisis in decades.

The decision to replace chief executive Rupert Hogg followed an accusation from Beijing’s aviation regulator that Cathay was putting flight safety at risk after several of the airline’s employees allegedly participated in the protest movement.

In an unprecedented development for a Hong Kong private sector company, the management change was first revealed by mainland Chinese state-run media rather than Cathay.

“Recent events have called into question Cathay Pacific’s commitment to flight safety and security and put our reputation and brand under pressure,” John Slosar, the company’s chairman, said in a statement. “We therefore think it is time to put a new management team in place who can reset confidence and lead the airline to new heights.”

Hong Kong’s flag carrier has become the most high-profile business in the international financial hub to be caught between Beijing and customers in mainland China, and its Hong Kong staff and protesters in the territory.

The anti-government protests started as opposition to a proposed extradition law but have since expanded to include democratic reforms. This has drawn the ire of Beijing, which has massed paramilitary police on the border, sparking fears of military intervention.

Merlin Swire, the chairman of Swire Pacific, which has a major shareholding in Cathay, was in Beijing on Monday, where he was told to make management changes, said one person with knowledge of the matter. Mr Swire did not immediately respond to a request for comment from the Financial Times.

According to a stock exchange filing from Cathay, Mr Hogg “confirmed that he has resigned to take responsibility as a leader of the company in view of recent events and that he is not aware of any disagreement with the board”.

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The announcement was initially made by Chinese state broadcaster CCTV on its official Weibo account. CCTV’s phone app used a popular Chinese internet meme to report the news, which in effect translates as “if you don’t do stupid things, they won’t come back to bite you”.

“This is my first time seeing something like this happen . . . over my career here in Hong Kong covering stocks,” said Ivan Su, an analyst at Morningstar. “We are talking about a Hong Kong company, not a Chinese company. This happens with Chinese companies.”

Mr Hogg's resignation comes despite a rebound in Cathay's Hong Kong-listed stock, which dropped as much as 16.3 per cent this month but clawed back virtually all those losses by market close on Friday.

The replacement of Mr Hogg represents a U-turn for Cathay, whose chairman, John Slosar, last week defended his employees' freedoms even as calls for a boycott of the airline circulated on Chinese social media.

“We employ 27,000 staff in Hong Kong . . . we certainly wouldn’t dream of telling them what they have to think about something,” Mr Slosar said at a press conference.

Cathay has fired four employees, including two pilots, since the protests began.

The board appointed Augustus Tang, currently group chief executive of Hong Kong Aircraft Engineering Co (Haeco), a subsidiary of Swire Pacific, as the new chief executive, according to a statement from Cathay.

Additional reporting by Christian Shepherd in Hong Kong



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