Convoy Global Holdings, the Hong Kong financial advisory firm that lost its three most senior executives 10 days ago to the city’s largest graft crackdown in a decade, said it was going to spend its way into the hearts and minds of customers and investors to restore their confidence.
The Hong Kong provider of retirement planning and insurance services, whose 100,000 clients include the city’s Mandatory Provident Fund (MPF), said it would spend HK$300 million (US$38.4 million) to more than double its team of financial advisers next year, pay a bonus to retain staff and expand its business.
“Our cash flow position is enough for us to maintain our operations for 18 months, even if we do nothing during the period,” Convoy’s president and executive director, Ng Wing-fai, said during a Sunday media briefing, adding that the firm has spent the past 10 days verifying its financial health with a new management team.
Ng and Convoy’s management team have to clean up the aftermath of a crackdown by the Independent Commission Against Corruption (ICAC) on loans and financing offered to related companies.
Three members of the previous management – chairman Quincy Wong Lee-man, vice-chairman Rosetta Fong Sut-sam and executive director Christie Chan Lai-yee – were arrested by the ICAC and suspended by Convoy’s board. Wong’s arrest followed the detention a day earlier of former Convoy chief executive Mark Mak Kwong-yiu, who now serves as chairman of Lerado Financial Group.
The cross-holdings among controlling shareholders have “hijacked” Convoy’s business over the past two to three years, Ng said.
“Such a complicated issue requires a lot of information and time for investigation,” he said. “The cancer is not spreading.”
Convoy is likely to suffer a substantial loss as a result of the ICAC investigation into loans estimated by market sources at up to HK$1 billion, although Ng declined to elaborate. The loss would not have any severe impact on the firm’s operation, he said.
Convoy planned to more than double its financial advisory team to 3,000 staff in 2018, Ng said, but the immediate priority was to resume the trading of Convoy’s shares, over which the company is in discussions with the stock exchange.
“The company is not the subject under investigation,” Ng said.“The problem is isolated in three subsidiaries” of Convoy, he said.
Still, the dust may be far from settling at Convoy, as the largest shareholder, Kwok Hiu-kwan, who owns 29.91 per cent of the company, has called for a shareholders meeting on December 29 to expel eight directors, including Ng.
Ng said the board had sent a letter to Kwok about the appointment of the new management team led by interim chairman and executive director Johnny Chen Chi-wang.
“Let’s wait and see,” he said.
This article Convoy plans to spend HK$300 million on hiring and bonuses to boost morale after graft arrests first appeared on South China Morning Post