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Hong Kong anti-graft body raids clinic operator as probe into Convoy financial scandal widens

The Independent Commission Against Corruption and the Securities and Futures Commission search the offices of Town Health International Medical Group

PUBLISHED : Wednesday, 14 February, 2018, 12:57pm
UPDATED : Wednesday, 14 February, 2018, 11:36pm

Hong Kong’s anti-graft body and market regulator have searched the offices of medical clinic operator Town Health International Medical Group in the latest move in their joint investigation into a web of wrongdoing surrounding financial advisory firm Convoy Global Holdings.

The Independent Commission Against Corruption and the Securities and Futures Commission executed a search warrant on February 9 at the premises of the medical clinic group in the northern Sha Tin area, Town Health International said in a filing to the stock exchange late on Tuesday night.

The crackdown on Convoy and related companies that began in December is Hong Kong’s largest anti-graft and market misconduct case, and has led to the arrests of four people, including Convoy’s former chairman, Quincy Wong Lee-man, and Mark Mak Kwong-yiu, former chairman of a related financial services firm, Lerado.

Web of lawsuits involving Hong Kong finance firm Convoy to be heard in court together in March

Town Health International’s founder and executive deputy chairman is Cho Kwai-chee, who is a former director of Convoy. Town Health’s chairwoman is Crystal Choi Ka-yee, daughter of Hong Kong’s “toy king”, industrialist Choi Chee-ming. Choi Chee-ming is also deputy chairman and a non-executive director of Town Health.

Town Health said the ICAC action was related to alleged offences under sections 9(1) and 9(2) of the Prevention of Bribery Ordinance, which prohibits the offering of a bribe to or its acceptance by employees of the company and to the use of false document by an agent to deceive his principal.

It is also related to section 179(1) of the Securities and Futures Ordinance, which gives the SFC powers to require the production of documents and records in respect of criminal or other misconduct involving a corporation that is or was listed.

“To the best of the knowledge, information and belief of the directors, the search has not affected the business and operation of the group,” Town Health said.  

Its shares have been suspended from trading by the SFC since November 27 after the regulator found misleading information in some of the company’s earnings reports.

The SFC had no comment on Wednesday on whether anyone had been arrested in the latest action. 

Timeline: How Convoy morphed from MPF adviser to focus of Hong Kong’s biggest graft probe

In a December 18 lawsuit, Convoy claimed that a HK$1.57 billion (US$210 million) investment by the wealthy Tsai family of Taiwan was diverted and stolen by company insiders. The company sued Cho Kwai-chee for misuse of the funds.

Cho could not be reached for comment.


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