ICAC swoops on finance firm in $50m probe

Top News | Riley Chan 8 Dec 2017

ICAC officers yesterday arrested the vice chairwoman and executive director of financial firm Convoy Global Holdings following a six-month investigation into a loan scam that involves about HK$50 million.

Sources said the Independent Commission Against Corruption arrested vice chairwoman Rosetta Fong Sut-sam and executive director Christie Chan Lai-yee yesterday morning.

The sources said chairman Quincy Wong Lee-man, and executive director Cho Kwai-chee were also subjects of the investigation.

The ICAC confirmed last night it was a joint action with the Securites and Futures Commission.

Wong is now in Taiwan. He did not seem to see the storm coming as he updated his social media page on Wednesday night with a picture of himself and his wife having a fried-chicken dinner in Taipei.

Ten other company members, mostly senior management, were also taken in for questioning in an operation codenamed Dolphin.

Convoy said last night that the ICAC operation involves two executive directors of the company. "Since the incident involves potential litigation, it is not appropriate for the company to make further comments on the case at the present stage," it said.

The early morning arrests sent shares of Convoy plunging 7 percent to 16.7 HK cents before trading was suspended at 11.04 at the company's request.

It is understood the investigation involves some members of Convoy's senior management who established a private company and took loans from Convoy. It then offered loans to other private companies, accumulating profits of about HK$47 million from March to June 2015. Fong, 48, was seen walking out of ICAC headquarters yesterday.

Established in 1993, Convoy focuses mainly on financial services as a broker for investment and was listed on the Hong Kong stock market in 2010.

In an internal memo, group president and executive director Ng Wing-fai said it was Convoy which requested the suspension following Fong's arrest.

Sources said the operation is related to the company's transactions involving the transfer of benefits.

It is believed the ICAC initiated the investigation after a complaint that a financial institution granted a suspicious loan.

Convoy became the sixth company on the list of "50 stocks not to own" being probed by the ICAC.

Written by former director of Hong Kong Exchanges and Clearing David Webb, who is now a share market analyst, the report listed 50 companies that he believed were entwined in a complex web of cross-shareholdings that had pushed their valuations to unsustainable levels. Since the report was published in May, trading in five companies has been suspended by the Securities and Futures Commission - Town Health International Medical Group Limited, First Credit Finance Group Limited, New Ray Medicine International Holding Limited, China Wah Yan Healthcare Limited and Lerado Financial Group Company Limited.

Speaking to The Standard yesterday, Webb did not directly respond to whether ICAC had approached him for assistance in the case.

"I never comment on any discussions with regulatory bodies," he said.

But he said the probe might not be related to the company's activity on the stock market.

"Obviously the investigation points to the transactions of the company. But don't forget they also have a business on the side," he said.

The ICAC said among the 1,339 reports it received in the first six months of this year, 899 were corruption cases involving private institutions. Thirteen listed companies have been prosecuted by the ICAC in the past five years.

Fong joined the group in November 1998 and was appointed executive director in 2010. She became vice chairwoman in 2015, and is also the director of six subsidiary companies under the Convoy Group.

She was awarded Excellence in Achievement of World Chinese Young Entrepreneurs 2014, and holds several government posts such as member of the Housing Appeals Board, the Municipal Services Appeals Board and the Investigation Panel of the Hong Kong Institute of Certified Public Accountants.

Her profile says Fong is responsible for the group's brand building and cultural development, as well as corporate social responsibilities.

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