Independent Commission Against Corruption (ICAC)

Convoy scandal takes a new twist as ‘suffering minority group’ threatens legal action to recover losses

A group of ‘suffering minority shareholders’ is seeking to garner support for legal action against company, directors, owners

Roy Cho Kwai-chee, the alleged mastermind in the scandal, faces trial with two others on conspiracy to defraud group

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Pedestrians walk past the "@Convoy” sign outside the headquarters of Convoy Global Holdings in Hong Kong in December 2017. Photo: Bloomberg

Published: 7:00am, 16 Jun 2020Updated: 7:04am, 16 Jun 2020

The debacle at Convoy Global Holdings is taking a new twist after a group of long-suffering minority shareholders said it is mulling legal action to recoup their losses before the company is struck off the Hong Kong stock exchange.

The group is seeking to garner support from other investors for a “collective action” including a liquidation process, while pursuing answers from directors and major owners for one of Hong Kong’s biggest corporate scandals in decades, according to advertisements it placed in several local newspapers on Monday.

The move was triggered by the company’s announcement on June 5 that it was facing a delisting threat because trading in its shares has been suspended for more than 18 months. Convoy Global is appealing the decision.

“Convoy Group treats minority shareholders with zero transparency,” the group said in its advertisement, calling others to work together to safeguard their assets. “It will be impossible to continue to monitor Convoy Group in future” as a private entity, it added.

Roy Cho Kwai-chee, the alleged mastermind in the fraud involving Hong Kong's largest independent financial advisory firm Convoy Global. Photo: Winson Wong

Listed in 2010, Convoy Global was the largest independent financial advisory firm in Hong Kong with some 100,000 Mandatory Provident Fund clients at its peak.

The stock had lost 83 per cent of its value from its all-time high in 2015 when it last traded at HK$0.17 on December 6, 2017. It was halted the next day, following a high profile investigation by the Securities and Futures Commission and Independent Commission Against Corruption (ICAC) into allegations of fraud involving HK$4.4 billion (US$568 million) of transactions.

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