AFRC fines three Convoy Financial Holdings senior officers for CPA misconduct, totaling $760,000

The Accounting and Financial Reporting Council has imposed a total fine of HK$760,000 and disciplinary sanctions on three senior officers of Convoy Financial Holdings for certified public accountant misconduct.

The officers, including Mak Kwong-yiu, former chief executive officer of Convoy Financial Services, Chan Lai-yee, former chief financial officer, and Wong Suk-on, former manager of the finance and accounting department, have been publicly reprimanded and fined HK$400,000, HK$200,000, and HK$160,000, respectively.

The case originated from bond placements conducted by Convoy Financial Holdings. The Court of Final Appeal upheld the District Court's 2021 criminal convictions, ruling that Mak, with the assistance of Chan and Wong, orchestrated the use of an intermediary as a disguise in the bond placements. This arrangement resulted in the transfer of over HK$25 million to a connected entity in which Mak held an indirect interest, circumventing compliance requirements under the Hong Kong Stock Exchange's connected transaction rules. 

The three were found guilty of two counts of conspiracy to defraud: one count of conspiracy to defraud Convoy, its board of directors, shareholders, and potential investors, and another count of conspiracy to defraud the HKEX. Convoy Financial Holdings was previously listed in Hong Kong and was delisted on May 4, 2021.

The AFRC stated that criminal offenses involving fraud and dishonesty are fundamentally incompatible with the ethical standards required by the accounting profession. The gravity of the offenses is particularly severe given that they were committed by individuals holding senior executive and management positions. All three were members of the Hong Kong Institute of Certified Public Accountants at the relevant times but ceased to be members in 2023 and had never held practicing certificates. The AFRC noted that had they still been members, suspension or cancellation of their registration would have been appropriate.

Hester Leung, head of the disciplinary at the AFRC, said that professional accountants in business play a critical role in maintaining corporate governance, internal controls, and financial reporting. This is especially true for accountants employed by listed entities, where public accountability and market integrity are at stake. Engaging in fraudulent or dishonest conduct will seriously undermine public confidence and damage the profession's reputation. The AFRC will take firm and decisive action to uphold market integrity.
 

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