Hong Kong court overturns convictions of broker and 3 executives in alleged scheme to defraud Convoy of HK$51 million

Court of Appeal clears three executives of two charges of conspiracy to defraud and quashes conviction of fourth defendant

Trading in Convoy’s shares was halted following the scandal and the firm was delisted in 2021

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Hong Kong’s Court of Appeal delivered its ruling on Tuesday. Photo: Sun Yeung

Published: 9:02pm, 30 Apr 2024

A Hong Kong appellate court has overturned fraud convictions of three former executives of Convoy Financial Service Holdings and a local broker arising from an alleged scheme to defraud HK$51 million (US$6.5 million) in commissions and bonuses, marking the latest setback in a crackdown on white-collar misconduct.

Former Convoy executive director Mak Kwong-yiu, financial controller Christine Chan Lai-yee and manager Wong Shuk-on did not violate market protocols by not disclosing Mak’s stakes at a bond placement subagent hired to help sell the firm’s debts a decade ago, the Court of Appeal ruled on Tuesday.

The court cleared them of two charges of conspiracy to defraud while also quashing the conviction of the fourth defendant, former Gransing Securities general manager Lee Yick-ming, who faced one count of the same offence.

The latest court ruling left what was then Hong Kong’s largest financial fraud investigation in decades without a successful prosecution since it was launched by the Independent Commission Against Corruption (ICAC) in December 2017.

Convoy was a crucial piece of the so-called Enigma Network, a cluster of interrelated companies with layers of overlapping shareholdings that have defied years of regulatory crackdown amid suspicions of fraud, market manipulation and corporate wrongdoing.

At the time a joint investigation was launched by the ICAC and the Securities and Futures Commission, Convoy was the largest independent financial adviser in Hong Kong with more than 100,000 customers.

Trading in Convoy’s shares was halted and its management changed after the high-profile probe went public. The firm was delisted in 2021.

Hong Kong court overturns convictions of broker and 3 executives in alleged scheme to defraud Convoy of HK$51 million

Court of Appeal clears three executives of two charges of conspiracy to defraud and quashes conviction of fourth defendant Trading in Convoy’s shares was halted following the scandal and the firm was delisted in 2021

Court of Appeal clears three executives of two charges of conspiracy to defraud and quashes conviction of fourth defendant

Trading in Convoy’s shares was halted following the scandal and the firm was delisted in 2021