Swoops net ramp-and-dump suspects

Six senior executives of three listed companies - reportedly including star chef Wong Wing-chee - were among 10 people arrested in an "unprecedented" joint operation by Hong Kong and Singapore authorities to crack down on "ramp and dump" scams by a cross-border syndicate.

Wong, 62, allegedly used manipulative tactics to push up the stock price of his catering firm Dragon King.

It is understood that Goldway Education Group and Guru Online were also involved in the case.

Authorities said the suspects included a core member of the syndicate, six senior executives of three listed companies, two stooge account holders as well as a woman arrested in Singapore who helped push up the stock prices.

More than 100 officers of the Securities and Futures Commission and over 80 police officers raided 47 premises across the city on Wednesday and arrested eight men and a woman, aged 25 to 62, for alleged money laundering.

Some HK$48 million in 39 bank accounts was frozen and HK$2 million in cash and valuable items seized.

Singapore police and Monetary Authority of Singapore officers arrested a woman for alleged fraud and froze S$4.4 million (HK$25.17 million) of assets.

Authorities believed there were hundreds of victims. Senior Superintendent of Police Financial Intelligence and Investigation Bureau Cheng Lai-ki said the syndicate had conspired with executives of three listed firms and manipulated the market since the start of the year.

"They used social media platforms to brag that these shares would go up in order to lure innocent investors to buy those stocks at high prices," Cheng explained, adding the scammers might have let victims earn a little profit of a few thousands dollars at first to gain their trust.

"The suspects later earned profits by selling a large volume of stocks at inflated prices and caused those stocks to drop significantly, with innocent investors suffering a huge loss."

Cheng said the scammers transferred the profits to shell companies and to various bank accounts for money laundering. Police also found that the syndicate used securities accounts in both Hong Kong and Singapore for stock trading.

Leung Ka-yeung, senior inspector at the financial investigation division of FIIB, said the syndicate pushed up the stock prices of the three listed companies by 200 to 600 percent in a short period.

They also bragged on social media that they had insider information, Leung said. He said the syndicate pocketed up to HK$70 million.

Thomas Atkinson, executive director of the enforcement division of the SFC, said: "The unprecedented four-party joint operation was very successful.

"We have very sophisticated surveillance detection equipment. A lot of time you can see an increase in a stock's value but there's no real news why, there's no change in its fundamentals.

"A lot of time it's increasing in value because people are simply trading the stock back among themselves to create the appearance of volumes."

Michael Duignan, senior director at the enforcement division, said the suspicious trading activities of the syndicate was first identified by the SFC's real-time market surveillance team. The SFC then sought assistance from police and Singaporean authorities.

Authorities did not reveal which companies were involved nor the identity of the suspects. But sources said Wong - nicknamed "Chee Gor" or "Brother Chee" - a renowned chef who frequently appeared on cooking TV shows, was arrested.

Dragon King said Wong resigned as executive director and chief executive in July and resigned as a company director in September. His wife has also resigned. Trading in Dragon King's shares has been suspended since November 11.

Records show Wong had sold shares four times since June, netting around HK$86.4 million.

sophie.hui@singtaonewscorp.com

Editorial: Stock scam crackdown long overdue