Hong Kong's Independent Commission Against Corruption (ICAC) has charged two former senior executives of Convoy Financial Holdings Limited with conspiracy to defraud the SEHK (Stock Exchange of Hong Kong) and the directors and shareholders of Convoy.
Chan Lai Yee and Byron Tan Ye Kai, both former executive directors of Convoy Global, were charged by the ICAC with conspiring with Cho Kwai Chee, to defraud the Stock Exchange of Hong Kong Limited (SEHK), Convoy Global and its board of directors and shareholders between 1 April 2016 and 7 December 2017.
Cho allegedly conspired to defraud Convoy and its affiliates, leading Hong Kong's largest independent financial advisory firm to invest more than HK$89min a company related to him, according to statements by the Securities and Futures Commission (SFC) and the Independent Commission Against Corruption (ICAC).
The charge is the culmination of a joint investigation since December 2017 by the two regulators in a HK$715m legal battle surrounding Hong Kong's biggest financial scandal in decades.
The case relates to the so-called ‘enigma network', a group of closely linked publicly traded companies that witnessed simultaneous falls in their share prices in June 2017, prompting a regulatory crackdown.
Lai Yee was also alleged to have conspired with three individuals-Mak Kwong Yiu, a former executive director of Convoy Global; Wong Shuk On, a former manager of Convoy Global; and Lee Yick Ming, a general manager of Gransing Securities)-to defraud SEHK, Convoy Global and its board of directors and shareholders between 1 June 2014 and 7 December 2017 by inducing Convoy Global to pay over HK$49.6m as commission for placement of bonds via Gransing to a brokerage firm of which Mak was a shareholder and director.
Convoy's senior officials, led by chairman Johnny Chen Chi-wang, have filed writs against Roy Cho Kwai-chee and other related parties involved in a complex network of companies for their role in the company's HK$4.043bn ($520m) private placement in 2015.
In one of the writs, Convoy claims HK$715m in compensation from Cho and 12 others - nine persons and three companies - for a series of transactions that had led to losses at Convoy Collateral.
Cho was dismissed from Convoy's board last year after the company, the largest independent financial consultant in Hong Kong, could not reach him.
Cho, along with the five individuals, will appear before the Eastern Magistracy this Wednesday.