ICAC arrests 10 in swoop on TV maker
Skyworth Digital chairman accused of misappropriating 'substantial' funds
The ICAC has arrested the chairman, three board members and financial controller of television maker Skyworth Digital for alleged corruption relating to fraud and pilfering of corporate funds.
It is alleged Skyworth chairman Stephen Wong Wang-sang misappropriated a 'substantial amount' of company funds, with cash payments disguised as consultants' fees or service commissions.
According to a statement by the Independent Commission Against Corruption, this was done jointly with an executive director and the assistance of the company's financial controller.
Mr Wong, who is also a member of the Chinese People's Political Consultative Conference, was recently ranked the mainland's 31st richest man by Forbes magazine.
In all, 10 arrests were made yesterday in the ICAC operation dubbed 'Determination'. Also arrested was a former accountant accused of accepting bribes and falsifying accounts to assist the company's April 2000 listing on the Hong Kong stock exchange.
The accountant allegedly took bribes in the form of an executive appointment and share options.
The anti-graft officers made the arrests at a meeting of Skyworth's board in the company's Quarry Bay offices just before it was scheduled to hold a press conference to release its interim results.
Other locations were also raided in an operation involving about 100 officers.
The ICAC said the 10 executives arrested were being detained for inquiries.
Established in 1988 as an export company, Skyworth rose to become China's third-largest television manufacturer.
It claimed average annual sales growth of at least 30 per cent in the decade before its listing and saw its shares rise 38 per cent on their debut. But six months later Skyworth reported a net loss of $125.68 million and its share price plunged to below 40 cents. Only over the past 18 months have its shares returned to their listing level.
Skyworth secured a US$60 million term loan facility in October arranged by Bank of China Hong Kong (Holdings), DBS and ING Bank. While members of the loan syndicate declined to comment, a well-placed banking source said that only a small amount of the loan had been drawn down.
Before the arrests, Hong Kong Exchanges and Clearing suspended trading of Skyworth's shares, pending 'clarification of certain price-sensitive information'. On Monday, Skyworth's share price surged 6 per cent to close at $2.725.
The HKEx said yesterday it would not comment on individual cases but promised to assist the ICAC in its inquiries.
Skyworth is the sixth listed company to have its shares suspended from trading by HKEx this year, and the second in two weeks.
The other five are AKup International Holding, Kwong Hing International Holdings, Far East Pharmaceutical Technology, Global Tech Holdings and Wealthmark International (Holdings).
