Five in dock over Convoy fraud

Business | Tereza Cai 23 Jul 2019

The Independent Commission Against Corruption has charged five people related to Convoy Global (1019) of conspiracy to defraud The Stock Exchange of Hong Kong and Convoy Global's stakeholders.

Chan Lai-yee, the former chief financial officer of Convoy Global, and Byron Tan Ye-kai, former executive director of Convoy Global, face a joint charge of conspiracy to defraud the exchange and the company over the acquisition of True Surplus for over HK$89 million.

Meanwhile, four defendants, including Chan, have been charged by the ICAC with conspiracy to defraud the exchange, Convoy Global and its board of directors and shareholders over Convoy Global's placement of bonds. The other three are Mak Kwong-yiu, former executive director at Convoy Global, and Wong Shuk-on, former manager at Convoy Global, as well as Lee Yick-ming, general manager of Gransing Securities.

The defendants have been released on ICAC bail, pending their court appearance on Wednesday.

The five defendants and Roy Cho Kwai-chee, the former director of Convoy Global, who was charged by the ICAC with one count of conspiracy to defraud on May 16 for his alleged role in the scam, will appear in the Eastern Magistracy on Wednesday.

The SFC will continue to collaborate with the ICAC on this matter.

The ICAC earlier alleged Chow had acted as a de facto or shadow director of Convoy Global, exerting significant influence over its operation directly or indirectly.

In April 2016, Cho introduced to Convoy Global the potential acquisition of True Surplus. Five months later, Cho, Chan, and Tan caused Convoy Collateral, an indirectly wholly-owned subsidiary of Convoy Global, to acquire TSII for more than HK$89 million.

Cho was charged by concealing or failing to disclose that Cho was a substantial shareholder of Convoy Global. It is also alleged that it is concealing or failing to disclose the acquisition of True Surplus by Convoy Collateral as a connected transaction.

In the bond placement case, Convey Global's Mak, Chan and Wong all held substantial shares of Convoy Investment Services, while they dishonestly concealing that Convoy Investment Services, a connected person of Convoy Global, was in fact the actual placing agent of the bonds, caused Convoy Global to pay to Convoy Investment Services via Gransing commissions totaling over HK$49.6 million for placement of the bonds.

A Convoy spokesperson said the company will continue to fully support and cooperate with the investigations of law enforcement authorities as it has for almost two years and is proud to report that business operations remain strong.

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