Local courts in Hong Kong found Roy Cho Kwai-chee not guilty over fraud charges based on the largest-ever investigation conducted by the Securities and Futures Commission.
Cho was found not guilty for defrauding the stock exchange and investors in financial brokerage firm Convoy Global Holdings as well as the publication of false statements in the firm’s annual accounts.
Charges against co-defendants and ex-Covoy directors Chan Lai Yee and Byron Tan Ye Kai were also cleared.
Since 2017
The probe started as early as 2017 following local activist Investor David Webb's accusations that Convoy was part of an interrelated cluster of firms with overlapping shareholdings – coined the «Enigma Network» – seeking to defraud the Hong Kong bourse. Convoy shares collapsed while the SFC launched one of the largest raids in the city’s financial investigation history with seizures of property and documents.
In May 2019, the SFC and the Independent Committee Against Corruption (ICAC), the city’s anti-graft watchdog, first brought charges against the three to defraud the local bourse and investors of HK$89 million ($11.5 million) to buy companies linked to Cho who was also accused of receiving an undisclosed amount of $7.4 million from the deal.
Previously, SFC enforcement head Thomas Atkinson called the links «nefarious networks» that «enrich themselves at the expense of unsuspecting investors» in an October 2018 speech when he unveiled plans for action against 60 companies and individuals.
Not Guilty
According to district court judge Ernest Lin Kam-hung, there was not enough evidence presented to show collusion and that the responsibility of disclosure should not lie with the three defendants alone but collectively with the whole board of directors.
Separately, Cho still faces accusations by Convoy’s new management that he, several ex-directors and others had siphoned hundreds of millions of dollars from the firm through various methods including unsecured loans to related parties.
