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SFC

SFC

Executives of Hong Kong financial services firm Convoy under investigation by graft watchdog

Shares in the company fell 7 per cent after early media reports of raids on its offices by the Independent Commission Against Corruption, prompting the company to seek a suspension of trading

PUBLISHED : Thursday, 07 December, 2017, 5:24pm
UPDATED : Thursday, 07 December, 2017, 11:36pm

Two executive directors of Hong Kong financial services firm Convoy Global Holdings have been put under investigation by the city’s anti-graft body, the company said on Thursday, confirming media reports that had sent its shares down 7 per cent and prompted a suspension of trading.

The company, a financial adviser to Hong Kong’s Mandatory Provident Fund pension scheme and a provider of retirement planning and insurance services, first announced the suspension during the morning trading session, without giving any reasons.

The shares had fallen 7.2 per cent to 16.7 HK cents after several media reports early in the day that the Independent Commission Against Corruption had raided the home of the company’s vice-chairwoman, Fong Sut-sam, and its offices in the North Point district.

Convoy said in a statement later on Thursday that the investigation involved two executive directors, and the firm had already suspended them from duty. It did not elaborate. Earlier, president and executive director Ng Wing-fai had said in an email to staff seen by the South China Morning Post that the company would fully cooperate with the investigation and would be operating as normal.

The ICAC said in a later statement that it and the market regulator, the Securities and Futures Commission, had searched eight premises in a joint operation and had arrested three senior executives of a listed company for suspected corruption. It did not give the name of the company or give any further details. The SFC declined to comment.

The SFC has in recent weeks taken action against companies connected to Convoy and Cho Kwai-chee, an executive director of Convoy and a well known local investor nicknamed “Doctor Cho” because he is a medical doctor.

One of these companies, Town Health International Medical Group, of which Cho is executive deputy chairman, was ordered by the SFC to suspend trading in its shares on November 27, after the regulator said it found the company’s earnings report for the first half of 2016 and its annual report for 2016 included “materially false, incomplete or misleading information.”

Hong Kong regulator SFC orders loss-making medical firm to suspend trading

Town Health said at the time it was seeking legal advice as to its rights and was considering how to address the SFC’s concerns.

First Credit Finance Group, of which Convoy holds 29.5 per cent, was also ordered to suspend trading by the SFC on November 24. First Credit said at the time it was seeking legal advice to address the SFC’s concerns.

In early November, Convoy said one its shareholders, who has a 29.91 per cent stake, was seeking a special shareholder meeting to remove eight directors, including Cho. The shareholder, not identified in the announcement, did not give a reason for the removal call.

SFC pledges more aggressive enforcement action

The SFC is investigating 136 corporate fraud cases, of which 28 cases are classed as very serious, according to executive director of enforcement Tom Atkinson, speaking at regulatory forum in Hong Kong on October 11. He also said the regulator is investigating 15 financial firms for failing in their duties as listing sponsors.

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