Shares in Hong Kong financial firm Convoy suspended after reports of raid by graft watchdog

Enoch Yiu
Shares in Hong Kong financial firm Convoy suspended after reports of raid by graft watchdog

Shares in financial firm Convoy Global Holdings were suspended from trading on the Hong Kong stock market on Thursday morning after they fell seven per cent following media reports that one of its senior executives may be facing an investigation by the anti-graft body, the Independent Commission Against Corruption.

The company is a financial adviser for Hong Kong’s Mandatory Provident Fund pension scheme and for insurance products. It announced the suspension at 11.04am during the morning trading session, without giving any reasons.

The shares fell 7.2 per cent to 16.7 HK cents after several media reports that the ICAC had raided the home of the company’s vice-chairwoman, Fong Sut-sam, and its offices in the North Point district.

The SFC and ICAC declined to comment.

Convoy said in a statement later on Thursday that the investigation involved two executive directors, and the firm had already suspended them from duty. It did not elaborate. Earlier in the day, president and executive director Ng Wing-fai had said in an email to staff seen by the South China Morning Post that the company would fully cooperate with the investigation and would be operating as normal.

Hong Kong’s market regulator, the Securities and Futures Commission, has in recent weeks taken action against companies connected to Convoy and Cho Kwai-chee, an executive director of Convoy and a well known local investor nicknamed “Doctor Cho” because he is a medical doctor.

One of these companies, Town Health International Medical Group, of which Cho is executive deputy chairman, was ordered by the SFC to suspend trading in its shares on November 27, after the regulator said it found the company’s earnings report for the first half of 2016 and its annual report for 2016 included “materially false, incomplete or misleading information.”

Hong Kong regulator SFC orders loss-making medical firm to suspend trading

Town Health said at the time it was seeking legal advice as to its rights and was considering how to address the SFC’s concerns.

First Credit Finance Group, of which Convoy holds 29.5 per cent, was also ordered to suspend trading by the SFC on November 24. First Credit said at the time it was seeking legal advice to address the SFC’s concerns.

In early November, Convoy said one its shareholders, who has a 29.91 per cent stake, was seeking a special shareholder meeting to remove eight directors, including Cho. The shareholder, not identified in the announcement, did not give a reason for the removal call.

SFC pledges more aggressive enforcement action

The SFC is investigating 136 corporate fraud cases, of which 28 cases are classed as very serious, according to executive director of enforcement Tom Atkinson, speaking at regulatory forum in Hong Kong on October 11. He also said the regulator is investigating 15 financial firms for failing in their duties as listing sponsors.

This article Shares in Hong Kong financial firm Convoy suspended after reports of raid by graft watchdog first appeared on South China Morning Post

For the latest news from the South China Morning Post download our mobile app. Copyright 2017.