Cho Kwai-chee cleared in Convoy-related fraud charges

Hong Kong’s securities watchdog has failed to secure convictions in its largest  investigation.

Cho Kwai-chee, founder of Hong Kong’s largest private health-care group, was cleared of charges to defraud the stock exchange and investors in financial brokerage firm Convoy Global Holdings, where he had been a director, Bloomberg reports.

He was also found not guilty of publishing false statements in Convoy’s annual accounts. 

District Court Judge Ernest Lin Kam-hung cleared Cho of one charge of publishing false statements in the company’s 2016 annual report on March 29, 2017. 

Former Convoy directors, and co-defendants Christine Chan Lai-yee, 48, and former executive director Bryon Tan Ye-kai, 52, were also cleared, according to a court judgment handed down today.

The decision will be a setback for the Securities and Futures Commission and the Independent Commission Against Corruption, which brought the charges in May 2019.

Both agencies had assigned considerable resources to the investigation, which involved multiple raids and seizures of property and documents.

The SFC had been investigating Convoy since as early as 2017 after local activist investor David Webb accused the firm of being part of an elaborate network of intertwined public companies, prompting the share prices at several of them to collapse.

Cho still faces civil claims brought by Convoy’s new management against him and several ex-directors, as well as others accused of siphoning hundreds of millions of dollars from the firm including through unsecured loans to related parties.-additional reporting The Standard