Hong Kong’s anti-corruption watchdog has charged four financial professionals with conspiracy to defraud in connection with the stock market debut of a Macau construction company, underscoring growing regulatory scrutiny over audit practices and governance in the city’s capital markets.
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The Independent Commission Against Corruption (ICAC) said on Tuesday that the four conspired with the chairman of Huarchi Global Group Holdings to deceive the Hong Kong stock exchange by submitting a misleading accountants’ report on behalf of Huarchi in 2019, which portrayed an inflated business outlook ahead of its main board debut.
The four, who worked for Wellink CPA and its sister advisory firm, also allegedly colluded with three family members to conceal their identities when subscribing to nearly 5.9 million shares during the company’s initial public offering (IPO), falsely claiming to be independent investors with no ties to Huarchi, according to the charges.
The prosecution comes amid an uptick in corruption-related activity. The ICAC received 2,058 complaints in 2024, up 3 per cent from the previous year. Nearly 70 per cent of these involved the private sector, with the finance industry among the most frequently cited, receiving 140 complaints.
The alleged offences occurred between 2016 and 2021. The four professionals were identified as Lam Shui-mei, Siu Yuen-shan, Chan Wai-lun and Wong Yat-chung. The listing application of Huarchi Global was approved in October 2019, and an IPO was launched the next month. AFG Securities Limited was one of the placing agents. Huarchi Global was delisted in September 2023, according to ICAC.
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Investigators suspect the chairman paid HK$1.5 million to incentivise the group to subscribe to IPO shares, artificially boosting investor demand, the ICAC said.