Topic
- Court of Appeal clears three executives of two charges of conspiracy to defraud and quashes conviction of fourth defendant
- Trading in Convoy’s shares was halted following the scandal and the firm was delisted in 2021
Convoy is the centrepiece of the so-called Enigma Network, a group of up to 50 companies hidden by layers of cross holdings and opaque corporate structures that regulators claim have conspired to entrap minority investors.
The verdict marks the first victory for Hong Kong’s Independent Commission Against Corruption since the anti-graft agency and the securities watchdog revealed their joint investigation in December 2017 into Convoy’s financial dealings.
The FRC’s unprecedented move, its first announcement of such an inquiry since its establishment in 2006, underscores the resolve by Hong Kong’s regulators in cleaning up corporate malfeasance and financial fraud in Asia’s second-largest capital market.
Resumption of financial reporting could boost efforts by Convoy Group Holdings to maintain a Hong Kong listing.
The enlarged board would strengthen the hand of the Tsai family, which owns 29.98 per cent stake in Convoy, against an attempt by Kwok Hui-kwan – with 29.91 per cent shareholding – to seize control of the company, one of the financial advisers for Hong Kong’s mandatory pension fund.
The November 30 acquittal of the Convoy trio was a major setback for one of the city’s biggest investigations into financial malfeasance in decades, in the first joint prosecution between the ICAC and the Securities and Futures Commission (SFC).
Convoy, one of the largest advisers of Hong Kong’s Mandatory Pension Fund, is a crucial piece in a cluster of interrelated companies with layers of overlapping shareholdings that have resisted regulatory crackdowns.
The boardroom tussle comes just days before a verdict is expected on a former director and two associates, who face criminal charges of attempting to defraud Convoy of HK$89 million.
The tussle for control is the second attempt since December 2017 by Kwok to wrest control of Convoy from the Tsai family, when his votes were excluded from a tally, under a decision by Convoy’s chairman Johnny Chen.
Webb, who runs a website examining Hong Kong corporate governance and regulation, said he went public with his diagnosis to reassure investors ‘as the news would get out sooner or later’.
Education University of Hong Kong wants to remove Roy Cho Kwai-chee’s name from its main building, but has found it difficult to do so.
China e-Wallet Payment mistakenly reported a net loss for the first half of 2015, instead of HK$281.5 million (US$36 million) profit when a crucial document was lost in transit
