Hong Kong watchdog arrests seven in alleged HKD120m fraud

Hong Kong’s corruption watchdog has apprehended seven individuals suspected of engaging in fraudulent transactions and false accounting totaling HKD120 million.

Included among those arrested were the company’s chairperson and an executive director.

In a move to combat cross-boundary fraud and misconduct, the Independent Commission Against Corruption (ICAC), the Securities and Futures Commission (SFC), and the Macau Judiciary Police (PJ) conducted a joint operation known as “Demarcation” on Aug. 19 and 20.

This operation centered on allegations involving senior executives of a Hong Kong-listed company suspected of engaging in fictitious transactions and false accounting practices amounting to about HKD120 million.

The operation saw investigators jointly search six premises associated with the company, leading to the arrest of seven individuals, including the company’s chairman and an executive director.

The charges against the arrestees pertain to the use of forged documents with the intent to deceive under the Prevention of Bribery Ordinance.

Investigations have revealed troubling details regarding the activities of the company’s leadership.

Allegations indicate they falsified business documents and accounting records for subsidiaries situated in both Hong Kong and Macau.

Notably, the company’s trade receivables were reportedly reduced by over MOP113 million.

Additionally, authorities uncovered evidence suggesting more than HKD9 million of the company’s funds may have been misappropriated through these fraudulent activities.

Hong Kong media identified the company as Wai Hung Group Holdings Ltd, which has vast interests in Macau’s engineering and interior design activities.

Wu Chou Kit, an appointed lawmaker at the Legislative Assembly and Rita Santos, counselor for Portuguese Communities for Asia and Oceania, sit on the board of the cited companies as independent non-executive directors, according to the company’s website. However, Santos has publicly denied any involvement in the matter. “I heard about it in the news today (Thursday),” she told the Plataforma outlet.

Given the cross-boundary nature of the crimes, the Macau Judiciary Police also launched an investigation into related fraud offenses in Macau.

This marks the first concurrent law enforcement action of its kind between the two jurisdictions, according to regulators.