Hong Kong-listed company investigated over HK$95 million gold scam as police arrest six and launch hunt for major shareholder

Clifford Lo
·3-min read

Police have arrested six people and are hunting four other suspects, including a major shareholder in a Hong Kong-listed company, in connection with a HK$95 million gold scam, the force said on Wednesday.

Three men and three women were detained in a series of raids on Tuesday, while police have frozen bank accounts containing HK$3.1 million (US$397,400) they suspect of being the proceeds of crime.

The firm at the centre of the scam has been accused of acting as a guarantor in a fake investment company in which 20 people were conned into buying 279kg of gold bars between August 2018 and August last year. The victims, 11 men and nine women, include a merchant, lawyer and student.

Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China.

According to police, the group, aged between 32 and 65, includes one local resident, while the rest live in mainland China. A mainland lawyer had the largest loss, at HK$22 million, a police source said.

Some of the items seized by officers during the investigation into the scam. Photo: Jonathan Wong
Some of the items seized by officers during the investigation into the scam. Photo: Jonathan Wong

Asked whether the listed company was being investigated by the Securities and Futures Commission, Superintendent Yip Wing-lam said the firm had not suspended trading in the city and police would continue to maintain a close contact with the watchdog.

Yip also declined to reveal whether the shareholder or other suspects had fled the city.

The fake investment programme was set up by a bullion investment firm in 2018 but shut down earlier this year. Victims were convinced into buying gold bars worth about HK$300,000 each, and were told they could generate high returns.

They were told the gold they bought was leased to the listed company, and the returns were guaranteed.

“The victims would receive an annual return of 6.6 to 7.5 per cent as interest. At maturity, they would receive their principal in full,” Senior Inspector Chu Kin-wah, of the commercial crime bureau, said.

Hong Kong customs nets hairy crab shipment, pinches smuggling suspect

He said some of the victims received their interest in the first few months after their investment, but “none of them could get back their principal”.

Victims were first introduced to the investment programme through immigration consultants, or insurance and property agents.

The scam came to light when the investment company that created the programme shut down earlier this year, and the victims could not receive their returns and principal and sought help from police.

Police said the gold bars were not leased to the listed company, but held by the investment firm, which had already sold 164kg of the bullion for HK$51 million in cash with the help of another firm. Officers were still investigating the location of the rest of the gold bars.

Man gets community service over fake news on police sex assaults

The six people arrested were the CEO and four employees of the investment firm, and the manager of the company that helped in the sale of the gold bars.

They were arrested on suspicion of conspiracy to defraud.

No one from the listed company has been arrested so far.

Yip said the offices of the listed company and the investment firm were among the locations raided by police and documents including contracts were seized in the operation.

Police were also looking into two flats owned by the suspects said to be worth HK$9.1 million.

This article Hong Kong-listed company investigated over HK$95 million gold scam as police arrest six and launch hunt for major shareholder first appeared on South China Morning Post

For the latest news from the South China Morning Post download our mobile app. Copyright 2020.