Four audit staff charged by HK ICAC for alleged conspiracy to defraud over listing of Macao construction firm by false accounting
2025-5-6
Four audit and consultant staff of an accounting firm and its sister company implicated in a corruption investigation by the Hong Kong ICAC were charged on May 2 for allegedly conspiring together to defraud the Hong Kong Exchanges and Clearing Limited (HKEX) to approve the listing application of a Macao construction firm by preparing false accountants’ report showing its business growth. They were also suspected of conspiring with three relatives to conceal their identities in the subscription for placing shares of the construction firm in its initial public offering (IPO). The seven defendants will appear at the Eastern Magistrates’ Courts tomorrow (May 7) for mention.
The four audit and consultant staff, aged between 36 and 46, jointly face one count of conspiracy to defraud, contrary to Common Law. At the material time, Lam Shui-mei and Siu Yuen-shan were the audit principal and audit manager of Wellink CPA Limited (Wellink CPA) respectively; Chan Wai-lun and Wong Yat-chung were respectively the associate and manager of Wellink Corporate Advisory Limited (Wellink Corporate Advisory), a sister company of Wellink CPA. Siu Yuen-shan and Wong Yat-chung were both certified public accountants.
The four defendants further face one count of conspiracy to defraud with three relatives, aged between 46 and 50, namely the husband and brother-in-law of Lam Shui-mei, Li Man-heung and Li Kin-chit; and an elder sister of Wong Yat-chung, Wong Wing-man.
The seven defendants were released on ICAC bail, pending their appearance at the Eastern Magistrates’ Courts tomorrow (May 7) for mention. The prosecution will apply for transferring the case to the District Court for plea.
At the material time, Huarchi Global Group Holdings Limited (Huarchi Global), was a Macao-based construction company. In October 2016, Huarchi Global engaged Wellink CPA to be its reporting accountant for preparing the accountants’ report of Huarchi Global to facilitate its listing application on the main board of the HKEX. The four audit and consultant staff were assigned to prepare the report and perform the audit work on the financial position of Huarchi Global between January 2016 and April 2019.
In October 2019, the listing application of Huarchi Global was approved by the HKEX. An IPO was launched in November of the same year and AFG Securities Limited (AFG Securities) was one of the placing agents responsible for its shares subscription. Later in September 2023, Huarchi Global was delisted.
One of the charges alleges that between October 2016 and November 2019, the four audit and consultant staff had conspired with the chairman of Huarchi Global and others to defraud the director of Wellink CPA and the HKEX by falsely representing that the accountants’ report prepared by them accurately reflected the financial position of Huarchi Global, causing the director of Wellink CPA to endorse and submit the report to the HKEX, and the HKEX to approve the main board listing application of Huarchi Global.
It is also alleged that between October 2019 and April 2021, the four audit and consultant staff had conspired with their three relatives charged in the present case, the chairman of Huarchi Global and others to defraud AFG Securities, causing it to allot a total of 5,888,000 placing shares of Huarchi Global to individuals including Li Kin-chit and Wong Wing-man.
False representations were allegedly made that Li Kin-chit and Wong Wing-man were the ultimate beneficial owners of the allocated placing shares of Huarchi Global, independent of Huarchi Global, not funded by Huarchi Global or that they were not accustomed to take instructions from Huarchi Global in relation to the acquisition or disposal of its placing shares.
The investigation, which stemmed from a corruption complaint filed with the Hong Kong ICAC, led to a joint operation mounted by the Commission, the Accounting and Financial Reporting Council (AFRC, formerly known as the Financial Reporting Council) and the Commission Against Corruption of Macao (CACC) in November 2021. During the operation, the offices of Wellink CPA and Wellink Corporate Advisory were searched by the Hong Kong ICAC and the AFRC and individuals implicated in the present case were arrested, while the CACC searched the Macao office of the construction firm concerned.
Enquiries revealed that the four audit and consultant staff had allegedly falsified the accountants’ report of Huarchi Global showing its steady business growth to facilitate its listing application on the main board of the HKEX. It is suspected that the chairman of Huarchi Global had subsequently offered a reward of $1.5 million to the audit and consultant staff and their relatives for subscribing for the placing shares of Huarchi Global in its IPO.
As the bribery inquiries are still ongoing, the ICAC would not rule out laying additional charges against the individuals concerned or prosecuting others after seeking further legal advice from the Department of Justice.
The Hong Kong ICAC and the AFRC entered into a Memorandum of Understanding in 2021 to enhance collaboration in fighting against corruption, illicit activities and malpractices. While the present case was prompted by the maiden joint operation of the Hong Kong ICAC and the AFRC, the two agencies will continue to maintain close collaboration to foster the audit quality and integrity of financial reporting by listed entities and their auditors and the integrity of the financial market. On the corruption prevention and educational front, the two agencies have been working closely with the relevant professional bodies, such as providing corruption prevention training and advice for the industry, to enhance their integrity management and corruption prevention awareness.
The AFRC and the CACC rendered full assistance to the Hong Kong ICAC during its investigation into the case.
The four audit and consultant staff, aged between 36 and 46, jointly face one count of conspiracy to defraud, contrary to Common Law. At the material time, Lam Shui-mei and Siu Yuen-shan were the audit principal and audit manager of Wellink CPA Limited (Wellink CPA) respectively; Chan Wai-lun and Wong Yat-chung were respectively the associate and manager of Wellink Corporate Advisory Limited (Wellink Corporate Advisory), a sister company of Wellink CPA. Siu Yuen-shan and Wong Yat-chung were both certified public accountants.
The four defendants further face one count of conspiracy to defraud with three relatives, aged between 46 and 50, namely the husband and brother-in-law of Lam Shui-mei, Li Man-heung and Li Kin-chit; and an elder sister of Wong Yat-chung, Wong Wing-man.
The seven defendants were released on ICAC bail, pending their appearance at the Eastern Magistrates’ Courts tomorrow (May 7) for mention. The prosecution will apply for transferring the case to the District Court for plea.
At the material time, Huarchi Global Group Holdings Limited (Huarchi Global), was a Macao-based construction company. In October 2016, Huarchi Global engaged Wellink CPA to be its reporting accountant for preparing the accountants’ report of Huarchi Global to facilitate its listing application on the main board of the HKEX. The four audit and consultant staff were assigned to prepare the report and perform the audit work on the financial position of Huarchi Global between January 2016 and April 2019.
In October 2019, the listing application of Huarchi Global was approved by the HKEX. An IPO was launched in November of the same year and AFG Securities Limited (AFG Securities) was one of the placing agents responsible for its shares subscription. Later in September 2023, Huarchi Global was delisted.
One of the charges alleges that between October 2016 and November 2019, the four audit and consultant staff had conspired with the chairman of Huarchi Global and others to defraud the director of Wellink CPA and the HKEX by falsely representing that the accountants’ report prepared by them accurately reflected the financial position of Huarchi Global, causing the director of Wellink CPA to endorse and submit the report to the HKEX, and the HKEX to approve the main board listing application of Huarchi Global.
It is also alleged that between October 2019 and April 2021, the four audit and consultant staff had conspired with their three relatives charged in the present case, the chairman of Huarchi Global and others to defraud AFG Securities, causing it to allot a total of 5,888,000 placing shares of Huarchi Global to individuals including Li Kin-chit and Wong Wing-man.
False representations were allegedly made that Li Kin-chit and Wong Wing-man were the ultimate beneficial owners of the allocated placing shares of Huarchi Global, independent of Huarchi Global, not funded by Huarchi Global or that they were not accustomed to take instructions from Huarchi Global in relation to the acquisition or disposal of its placing shares.
The investigation, which stemmed from a corruption complaint filed with the Hong Kong ICAC, led to a joint operation mounted by the Commission, the Accounting and Financial Reporting Council (AFRC, formerly known as the Financial Reporting Council) and the Commission Against Corruption of Macao (CACC) in November 2021. During the operation, the offices of Wellink CPA and Wellink Corporate Advisory were searched by the Hong Kong ICAC and the AFRC and individuals implicated in the present case were arrested, while the CACC searched the Macao office of the construction firm concerned.
Enquiries revealed that the four audit and consultant staff had allegedly falsified the accountants’ report of Huarchi Global showing its steady business growth to facilitate its listing application on the main board of the HKEX. It is suspected that the chairman of Huarchi Global had subsequently offered a reward of $1.5 million to the audit and consultant staff and their relatives for subscribing for the placing shares of Huarchi Global in its IPO.
As the bribery inquiries are still ongoing, the ICAC would not rule out laying additional charges against the individuals concerned or prosecuting others after seeking further legal advice from the Department of Justice.
The Hong Kong ICAC and the AFRC entered into a Memorandum of Understanding in 2021 to enhance collaboration in fighting against corruption, illicit activities and malpractices. While the present case was prompted by the maiden joint operation of the Hong Kong ICAC and the AFRC, the two agencies will continue to maintain close collaboration to foster the audit quality and integrity of financial reporting by listed entities and their auditors and the integrity of the financial market. On the corruption prevention and educational front, the two agencies have been working closely with the relevant professional bodies, such as providing corruption prevention training and advice for the industry, to enhance their integrity management and corruption prevention awareness.
The AFRC and the CACC rendered full assistance to the Hong Kong ICAC during its investigation into the case.