Four charged with conspiracy to defraud over bonds placement of listed company
2019-7-22
Two former senior executives and a former manager of a listed company, and a senior executive of a placing agent have been charged by the ICAC today (July 22) with conspiracy to defraud The Stock Exchange of Hong Kong Limited (SEHK), the listed company and its board of directors and shareholders over the placement of bonds issued by the listed company.
The defendants are Mak Kwong-yiu, 44, former executive director of Convoy Financial Services Holdings Limited (Convoy Financial Services); Chan Lai-yee, 46, former financial controller of Convoy Financial Services; Wong Shuk-on, 40, former manager of Convoy Financial Services; and Lee Yick-ming, 48, general manager of Gransing Securities Co., Limited (Gransing).
The four defendants face a joint charge of conspiracy to defraud, contrary to Common Law.
The defendants will appear in the Eastern Magistracy on Wednesday (July 24) afternoon for mention.
The ICAC investigation commenced upon receipt of complaints alleging breaches of the Prevention of Bribery Ordinance and the Securities and Futures Ordinance, followed by an operation jointly mounted with the Securities and Futures Commission (SFC) in December 2017.
At the material time, Convoy Financial Services, later renamed as Convoy Financial Holdings Limited, was listed (publicly listed Convoy) on the Main Board of the SEHK.
Gransing and Convoy Investment Services Limited (Convoy Investment Services) were both licenced corporations of the SFC, providing corporate finance services, such as bonds issuance and placement.
Mak, Chan and Wong were respectively executive director, financial controller (later promoted to chief financial officer) and manager of publicly listed Convoy, while Lee was the general manager of Gransing.
Mak was also a director of Convoy Investment Services, which was not a subsidiary of publicly listed Convoy. He and two other executive directors of publicly listed Convoy held substantial shares of Convoy Investment Services.
The charge alleges that between June 1, 2014 and December 7, 2017, the four defendants conspired together to defraud the SEHK, publicly listed Convoy, its board of directors and shareholders by dishonestly:
a) causing publicly listed Convoy to enter into agreements with Gransing to purportedly engage Gransing as the placing agent for the placement of bonds to be issued by the listed company (the bonds);
b) arranging Gransing to enter into agreements with Convoy Investment Services to purportedly engage the latter as the sub-placing agent of the bonds;
c) concealing or failing to disclose that Convoy Investment Services, a connected person of publicly listed Convoy under the Rules Governing the Listing of Securities on the SEHK (“the Listing Rules”), was in fact the actual placing agent of the bonds;
d) concealing or failing to disclose that in so acting as a placing agent for placement of the bonds, Gransing was a connected person of publicly listed Convoy under the Listing Rules; and,
e) causing publicly listed Convoy to pay to Convoy Investment Services via Gransing commissions totalling over $49.6 million for placement of the bonds.
The defendants have been released on ICAC bail, pending their court appearance on Wednesday.
The SFC will continue to collaborate with the ICAC on this matter.
The SEHK and Convoy Global Holdings Limited have rendered full assistance to the ICAC during its investigation.
The defendants are Mak Kwong-yiu, 44, former executive director of Convoy Financial Services Holdings Limited (Convoy Financial Services); Chan Lai-yee, 46, former financial controller of Convoy Financial Services; Wong Shuk-on, 40, former manager of Convoy Financial Services; and Lee Yick-ming, 48, general manager of Gransing Securities Co., Limited (Gransing).
The four defendants face a joint charge of conspiracy to defraud, contrary to Common Law.
The defendants will appear in the Eastern Magistracy on Wednesday (July 24) afternoon for mention.
The ICAC investigation commenced upon receipt of complaints alleging breaches of the Prevention of Bribery Ordinance and the Securities and Futures Ordinance, followed by an operation jointly mounted with the Securities and Futures Commission (SFC) in December 2017.
At the material time, Convoy Financial Services, later renamed as Convoy Financial Holdings Limited, was listed (publicly listed Convoy) on the Main Board of the SEHK.
Gransing and Convoy Investment Services Limited (Convoy Investment Services) were both licenced corporations of the SFC, providing corporate finance services, such as bonds issuance and placement.
Mak, Chan and Wong were respectively executive director, financial controller (later promoted to chief financial officer) and manager of publicly listed Convoy, while Lee was the general manager of Gransing.
Mak was also a director of Convoy Investment Services, which was not a subsidiary of publicly listed Convoy. He and two other executive directors of publicly listed Convoy held substantial shares of Convoy Investment Services.
The charge alleges that between June 1, 2014 and December 7, 2017, the four defendants conspired together to defraud the SEHK, publicly listed Convoy, its board of directors and shareholders by dishonestly:
a) causing publicly listed Convoy to enter into agreements with Gransing to purportedly engage Gransing as the placing agent for the placement of bonds to be issued by the listed company (the bonds);
b) arranging Gransing to enter into agreements with Convoy Investment Services to purportedly engage the latter as the sub-placing agent of the bonds;
c) concealing or failing to disclose that Convoy Investment Services, a connected person of publicly listed Convoy under the Rules Governing the Listing of Securities on the SEHK (“the Listing Rules”), was in fact the actual placing agent of the bonds;
d) concealing or failing to disclose that in so acting as a placing agent for placement of the bonds, Gransing was a connected person of publicly listed Convoy under the Listing Rules; and,
e) causing publicly listed Convoy to pay to Convoy Investment Services via Gransing commissions totalling over $49.6 million for placement of the bonds.
The defendants have been released on ICAC bail, pending their court appearance on Wednesday.
The SFC will continue to collaborate with the ICAC on this matter.
The SEHK and Convoy Global Holdings Limited have rendered full assistance to the ICAC during its investigation.