The Carrian Fraud Case

Skip To Main Content

Carrian (The Carrian Group of Companies) - a brand well known to the people of Hong Kong - went from birth to bust in four short years between 1979 and 1983. Through corruption and deception, the senior management of the Carrian Group painted a rosy yet completely imaginary picture of their company group and gave a short-lived but volatile stimulus to the Hong Kong stock market. The story began in 1972……

The Making of a Business Empire

In 1972, a 37-year-old Singaporean civil engineer arrived in Hong Kong to work as a project manager in a subsidiary company of a land developer. Soon the engineer was the land developer’s ‘hotshot’ and was even given the financial backing to establish a joint enterprise with the developer.

Following the stock market slump in 1973, signs of rapid recovery in the Hong Kong property market began to emerge in 1976. The engineer saw a window of opportunity and started to purchase land in the New Territories with the intention of becoming a major property player. Meanwhile, he set up the Carrian Pest Specialist Ltd., the first company carrying the ‘Carrian’ company brand. By the end of 1977, he established Carrian Holdings Ltd. (the so-called Carrian/Carrian Group), with himself as the group chairman (Carrian chairman), controlling other companies formed or acquired by himself, including the group’s first listed company, Carrian Investments Limited (CIL). The proliferation of Carrian businesses was then incessant, in transport, shipping, tourism, insurance, real estate, finance, catering, hotels and even entertainment. The Group also spread its businesses tentacles from Hong Kong to other parts of the world, including Taiwan, Singapore, Malaysia, Thailand, The Philippines, Japan, Australia, New Zealand and the United States. Carrian had become a multi-faceted business conglomerate controlling more than 200 subsidiary companies.

the_making_of_a_business_empire_img_01

The Acquisition of Gammon House

With the Carrian empire fast expanding and its share price skyrocketing, many investors were eager to get their hands on Carrian stocks. But the single deal which really gave the Carrian chairman his legendary reputation was the 1980 acquisition of Gammon House.

In January 1980, through a company of which he had a 75% stake, the Carrian chairman acquired the ownership of Gammon House in Central at a price of HK$998 million. Then, after just a few months, it was announced that Gammon House had been sold to another consortium for HK$1.68 billion. The news staggered property and financial markets. News reports quoted the Carrian chairman as saying that the capital used for the acquisition came solely from the Carrian Group and a conglomerate which had long supported him behind the scenes. No bank loan was sought, he repeatedly said. At about the same time, Carrian struck another deal to purchase a listed company at a price of HK$300 million. This company, thus renamed Carrian Investments Limited (CIL), became the Carrian Group’s first listed company. These two acquisitions not only lifted Carrian’s profile in the Hong Kong property market, but also showed off its substantial financial strength. In November 1980, the Carrian share price hit a historic high of HK$17.9 per share.

Foreword
Infamous files
calendar_of_event_bgimg_01 calendar_of_event_bgimg_02
calendar_of_event_img_01 Rise and Fall of the Carrian Group Carrian and Bummiputra Carrian and Other Banks
Key persons relating to the case
NEXT
TOP