Hong Kong police arrest 37 over use of loan scheme to defraud banks of HK$210 million
- Twenty-three sham directors and 14 employees of shell companies submitted loan applications under government-backed scheme
Superintendent Gar Kam-lam of the Kowloon West regional crime unit said on Thursday that the suspects, who were arrested between Monday and Wednesday, comprised 23 directors and 14 employees of companies allegedly set up by the racket to carry out the loan scam.
Gar said the company directors included an alleged ringleader and seven core members of the syndicate. It submitted 42 loan applications to banks under the financing guarantee scheme aimed at helping small and medium-sized enterprises (SMEs) affected by the Covid-19 pandemic.
Police investigations began in November last year after two banks reported suspicious account activities.
A source familiar with the case said the loan scam involved 42 firms set up by the syndicate, with police discovering that most of them were shell companies.
The insider said the applications, totalling more than HK$210 million, were approved and investigators were still trying to track down the funds.