Seven arrested in cross-boundary joint operation against suspected fraud involving HK-listed firm

Staff reporter

The Independent Commission Against Corruption, the Securities and Futures Commission, and the Macau Judiciary Police have conducted a joint operation against suspected cross-boundary fraud and misconduct of a Hong Kong-listed company in a case involving some HK$120 million.

Seven individuals, including the company's chairman and an executive director, have been arrested, according to a joint statement by regulators yesterday.

Sources said the company is Wai Hung Group and the persons arrested include its chairman Li Kam-hung, executive director Yu Ming-ho, and accountants.

They added that the arrests are related to fictitious transactions and false accounting of the company's project in Macau.

Wai Hung's main business covers providing fitting-out services for casinos, retail areas, hotels and restaurants.

Trading in shares of Wai Hung was halted on Monday.

ICAC and SFC said six premises were searched during the joint operation, adding those arrested had allegedly committed the offense of using documents with intent to deceive their principal under the Prevention of Bribery Ordinance.

The investigation revealed that the chairman of the listed company and other individuals had allegedly falsified business documents and accounting records of the company's subsidiaries in Hong Kong and Macau, while the company's trade receivables totaling over 113 million patacas (HK$110 million) were reduced.

Meanwhile, the individuals concerned had also allegedly used false documents and accounting records to conceal the misappropriation of the company's funds over HK$9 million.

The suspected misconduct may have also led to violations of the Securities and Futures Ordinance, including the disclosure of false or misleading information and other financial misconduct such as fraud and misfeasance, according to the statement.

Given the cross-boundary nature of the crimes, the Macau Judiciary Police also launched an investigation into related fraud offenses that took place in Macau.

This marks the first concurrent law enforcement action of its kind between the two jurisdictions, regulators said.

The ICAC and SFC added that the investigation is ongoing and have declined to provide further details at this stage.