Convoy shares to be delisted from Hong Kong stock exchange on Tuesday

Convoy reported a combined loss of HK$2.6 billion (US$335 million) for three years from 2017 to 2019
Shares of the company had been suspended since December 2017 after regulators launched an investigation into its former directors

HKEX

Enoch Yiu

Published: 8:42pm, 30 Apr 2021

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Shares of Convoy Global Holdings, the financial services company at the centre of Hong Kong’s biggest corporate scandal, will be delisted on Tuesday as it had failed to fulfil its obligation that would have allowed trading to restart, the Hong Kong stock exchange said on Friday evening.

Trading of Convoy’s shares had been suspended since December 2017 as regulators began their investigations following a scandal that saw its former director Roy Cho Kwai-chee and two associates criminally charged. The trio was prosecuted and acquitted in November 2020 of conspiring to defraud HK$89 million (US$11.5 million) from Convoy, but the Independent Commission Against Corruption (ICAC) is appealing the decision.

Hong Kong’s stock exchange had announced last May that it would expel Convoy, a decision which the company appealed against. The exchange on Friday announced that it had rejected the appeal and would cancel the listing status of the company from May 4.

“We believe the [delisting] decision is unfortunate and unjustified as this has effectively allowed wrongdoers to cause further griefs to the shareholders, particularly minority shareholders,” Lee Jin-yi, chairman of Convoy, said in an open letter to shareholders published on the exchange’s website on Friday.

Former Convoy director Roy Cho Kwai-chee was acquitted of a charge to defraud the company of HK$85 million in November last year. Photo: Nora Tam

The loss of the listing status would be another blow to Convoy’s shareholders who have faced several setbacks, including a power struggle that has been going on for several years between two major shareholders, with no resolution in sight. In February, Convoy reported a combined loss of HK$2.6 billion (US$335 million) for 2017, 2018 and 2019.

Lee said the company had considered seeking judicial review against the stock exchange’s decision, but said it would take a long time for the legal battle and it was not in the best interests of the shareholders.

“Even with a judicial review, we do not see the prospect of the stock exchange allowing trading to resume in the near future,” he said.

Lee said Convoy would explore other methods for its shareholders to trade the shares, including a possible option to sell the shares to a blank-cheque Special Purpose Acquisitions Company for it to list in the US. He, however, did not give more details.

The lost of listing status would not affect the group’s normal business lines as its licences with the Insurance Authority, Securities and Futures Commission as well as Mandatory Provident Fund Schemes Authority, would not be affected by the delisting, Lee said.

Convoy provides financial advice to more than 100,000 pension holders in the city’s retirement savings scheme.

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