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A 'roller-coaster' ride of Carrian share prices
A 'roller-coaster' ride of Carrian share prices
Infamous  files
Infamous files
Calendar of Events
Calendar of Events
Key persons relating to the case
Key persons relating to the case
 
       
The astonishing rise of the Carrian Group raised many eyebrows. No doubt many short-term investors had made their 'money dreams' come true as the Carrian share price hit new highs. However, as they basked in the lustre of the Carrian legend, none was to realise that the scale of the underlying scam was as phenomenal as the company's rise to prominence. On the day the Carrian 'bubble' burst, Carrian shareholders suffered massive losses. The Carrian 'legend' became a miserable lesson for Hong Kong.
The unmaking of a 'legend'
 
Home
The Birth and Rise of the Carrian Group
A Glossy Apple Rotten to the Core
ICAC Investigation
Legal wrestling with the main culprits
Irrefutable Evidence
Victims' parade
Mixed Feelings of the Investigators
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The unmaking of a 'legend'
The Carrian and Bumiputra affair
Dissecting the scam
The Noordin Committee
]
Throughout his meteoric rise to fame, the Carrian chairman had wrapped himself in mystery. In both his personal and public incarnations, he was portrayed as a big spender. He splashed out huge sums on recruiting financial stars and professionals to act as his right-hand men, he worked in an ornate office, lived in a luxurious mansion and drove expensive cars. When caught in the limelight, he exuded immense charisma and persuasive powers. However, he generally maintained a low profile, rarely giving media interviews or granting photo-opportunities. As a result, the aura of mystery surrounding his rise to fame became even more intense. What people did perceive was the continued expansion of his businesses thanks to seemingly limitless injection of capital. At the time, many speculative reports regarding his origin and sources of finance were published, none of them conclusive.

In 1982, Sino-British talks on the future of Hong Kong began to shroud the city in uncertainty. The property market was sluggish and property prices were drifting downward. The economy suffered and the Carrian Group could not remain unaffected. In September 1982, Carrian still managed to report a profit of HK$269 million for the previous six months. Soon, however, the company announced its cash-flow problem. Instantly, its share price tumbled and Carrian's primary bank creditors petitioned for the company to be put into liquidation. The Group tried every means and made desperate attempts to re-organise its debts but to no avail. On 3 January 1983, the doomsday of a business empire that once reigned supreme, the Stock Exchange suspended trading of Carrian stock, following which the subsidiary companies were wound up one after another.

A sluggish economy was just a catalytic factor leading to the collapse of the Carrian Group. The 'deadliest' blow in fact was struck by the Carrian chairman's own corrupt and fraudulent conduct in generating capital for himself and creating a fictitious profit bubble.

The truth was that Carrian was already deep in debt and the sale of Gammon House was in fact never actually completed. The profits claimed to have accrued from the deal were never actually accounted for. As ICAC Chief Investigator Danny Lo King-wing put it, the Carrian Group's financial position was like 'trying to cover ten tea-pots with nine lids'. Investigations revealed that the finance company offering the many sizeable loans to Carrian was Bumiputra Malaysia Finance Limited (BMFL), a deposit-taking company set up in Hong Kong by Bank Bumiputra Malaysia Berhad (BBMB). To facilitate the acquisition of Gammon House, BMFL alone held out a staggering US$292 million credit to a new 'two-dollar' company solely controlled by the Carrian chairman. Such a huge loan arrangement was as unprecedented as it was extraordinary.