ICAC charges former Convoy Financial execs with conspiracy to defraud Hong Kong Stock Exchange

Maria Nikolova

Chan Lai-yee, former chief financial officer of Convoy Financial, and Byron Tan Ye-kai, former executive director of Convoy Financial, face a joint charge of conspiracy to defraud.

Hong Kong’s Independent Commission Against Corruption (ICAC) today announces that it has pressed charges against two former senior executives of Convoy Financial Holdings Limited for their alleged roles in a conspiracy to defraud The Stock Exchange of Hong Kong Limited (SEHK), the listed company and its board of directors and shareholders. The alleged fraudulent scheme is related to the acquisition of an investment company at a consideration of over $89 million.

Chan Lai-yee, 46, former chief financial officer of Convoy Financial, and Byron Tan Ye-kai, 51, former executive director of Convoy Financial, face a joint charge of conspiracy to defraud, contrary to Common Law.

The defendants are set to appear in the Eastern Magistracy on July 24, 2019, for mention.

The ICAC investigation commenced upon receipt of complaints alleging breaches of the Prevention of Bribery Ordinance and the Securities and Futures Ordinance, followed by an operation jointly conducted with the Securities and Futures Commission (SFC) in December 2017.

During the relevant period, Convoy Financial, later renamed as Convoy Global Holdings Limited (Convoy Global), was listed (publicly listed Convoy) on the Main Board of the SEHK. Chan and Tan were respectively the chief financial officer and executive director of publicly listed Convoy. Shareholding disclosures records showed that Cho Kwai-chee was only a minor shareholder of publicly listed Convoy and did not hold any directorship of the company during the acquisition.

Convoy Collateral Limited (Convoy Collateral) was an indirectly wholly owned subsidiary of publicly listed Convoy. Its principal activities were provision of money lending and proprietary investment.

It is also alleged that at the material time, there were discussions among Cho, Chan and Tan regarding the potential acquisition of True Surplus International Investment Limited, in which Cho held a 55% shareholding. The British Virgin Islands-incorporated company engaged in assets investment and provision of consultant services.

The charge alleges that between April 1, 2016 and December 7, 2017, Cho, Chan and Tan conspired together to defraud the SEHK, publicly listed Convoy and its board of directors and shareholders by dishonestly:

  • a) concealing or failing to disclose that Cho was a substantial shareholder or a director of publicly listed Convoy under the Rules Governing the Listing of Securities on the SEHK (“the Listing Rules”);
  • b) concealing or failing to disclose the acquisition of True Surplus by Convoy Collateral as a connected transaction; and
  • c) causing Convoy Collateral to acquire True Surplus on September 5, 2016 without publicly listed Convoy having complied with the Listing Rules governing connected transactions.

The defendants have been released on ICAC bail, pending their court appearance on Wednesday.

Cho, 55, was charged by the ICAC with one count of conspiracy to defraud on May 16 for his alleged role in the scam. He will also appear in the afternoon of Wednesday in the Eastern Magistrate for mention.

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