Hong Kong | Securities regulator freezes chairman assets, alleges USD1.3b con

Hng Kong’s securities regulator froze the assets of an unnamed chairman of a public company on suspicion of fraud totaling USD1.3 billion.

The person may have conducted two suspicious transactions to make significant profits, the Securities and Futures Commission said in a statement dated Sept. 17 but published to the city’s official Gazette on Friday. It did not name the company or person it suspects of being involved in the alleged fraudulent transactions.

The company has purportedly lost contact with the chairman, the SFC said, adding that recent news reports appear to indicate that the person may be abroad or under investigation in China as a suspect in corruption case.

The SFC said it has ordered Kingston Securities Ltd., Satinu Markets Ltd. and HSBC Broking Securities (Asia) Ltd. to stop any dealings with the person’s accounts. The person has securities and cash at the brokerages with an estimated value totaling HKD4.64 billion, the SFC said. Kingston Securities’s parent Kingston Financial Group Ltd. dropped as much as 7.7 percent in Hong Kong on Tuesday.

A spokesman for the SFC declined to comment beyond the statement. The amount ordered for freezing is the largest ever for the city, according to activist investor David Webb.

At least three chairmen have gone missing from Hong Kong-listed Chinese firms this year, including Yang Zhihui from casino operator Landing International Development Ltd. and Wang Fucai from Real Nutriceutical Group Ltd.

While incidents such as missing bosses may make investors more cautious about the Hong Kong market, “you cannot prevent cases like these,” said Alex Wong, Hong Kong-based director of asset management at Ample Capital Ltd.

Investors have also grappled with sudden share price plunges in the wake of short seller reports. The city’s bourse last month proposed a trading halt when auditors issue a disclaimer or adverse opinion on financial results as part of a review to address market concerns. Bloomberg