CFA unanimously allows DoJ’s appeal and restores convictions of four defendants in listed company bonds placement conspiracy to defraud case

The Court of Final Appeal (CFA) today (November 5) unanimously allowed the appeal by the Department of Justice (DoJ) and restored the convictions of four persons, including senior executives of a then listed company, who were charged by the ICAC with conspiracy to defraud over bonds placement of the listed company.

Mak Kwong-yiu, 51, former executive director of Convoy Financial Services Holdings Limited (Convoy Financial Services); Chan Lai-yee, 53, former chief financial officer of Convoy Financial Services; Wong Shuk-on, 46, former manager of Convoy Financial Services; and Lee Yick-ming, 55, former general manager of Gransing Securities Co., Limited (Gransing), were found guilty of two counts of conspiracy to defraud, contrary to the Common Law, after trial at the District Court in September 2021. Mak and Lee were respectively jailed for seven months and five months, while Chan and Wong were respectively sentenced to five months’ and four months’ imprisonment, both suspended for 18 months.

The four defendants’ appeal against their convictions was subsequently allowed by the Court of Appeal (CA) of the High Court. The DoJ then filed an appeal with the CFA against the ruling. The appeal was heard by Permanent Judges Mr Justice Roberto Ribeiro, Mr Justice Joseph Fok and Mr Justice Johnson Lam Man-hon, as well as Non-Permanent Judges Mr Justice Frank Stock and Sir William Young on September 3 and 4, 2025.

In the judgment handed down by the CFA today, the five judges unanimously allowed the DoJ’s appeal against the CA’s ruling and restored the four defendants’ convictions. Mak and Lee will serve their jail terms.

The CFA judges noted in the judgment that the court viewed the bonds placement agreements as a whole and construed the Rules Governing the Listing of Securities (the Listing Rules) on the The Stock Exchange of Hong Kong Limited (SEHK) purposively when assessing whether the transactions involved in the present case constituted connected transactions. The defendants interposed Gransing which served no commercial purpose in the chain of contracts to conceal the indirect interests in the bond placements agreements, breaching the fiduciary duty and constituting the conviction for conspiracy to defraud.

The ICAC’s investigation commenced upon receiving complaints in 2017 which alleged breaches of the Prevention of Bribery Ordinance and the Securities and Futures Ordinance. An operation was jointly mounted by the ICAC and the Securities and Futures Commission (SFC) in December 2017.

The court heard that at the material time, Convoy Financial Services, later renamed as Convoy Financial Holdings Limited, was listed (publicly listed Convoy) on the Main Board of the SEHK. Gransing and Convoy Investment Services Limited (CIS), which was not a subsidiary of publicly listed Convoy, both provided dealing in securities regulated activity, such as bonds placement.

Mak and two other former executive directors of publicly listed Convoy were substantial shareholders of CIS. If a bonds placement agreement involved transactions between publicly listed Convoy and CIS, the transaction was a connected transaction governed by the Listing Rules.

On four occasions between July 8, 2014 and January 21, 2015, publicly listed Convoy engaged Gransing as the placing agent of four bond placing exercises of the publicly listed Convoy. The defendants conspired together to arrange Gransing to further engage CIS as the sub-placing agent of the four bond placing exercises. CIS subsequently received around $49.6 million as sub-placing commission from publicly listed Convoy via Gransing and $1.2 million as bonus from Gransing under the sub-placing arrangements.

In fact, Gransing did not place any bonds with any investor and CIS was the actual placing agent. The four defendants dishonestly concealed from publicly listed Convoy and its board of directors and shareholders as well as the SEHK that CIS was the actual placing agent of the four bonds. They had also used Gransing to conceal CIS’s involvement in the bonds placement, causing CIS to receive sub-placing commission. In addition, the concealment deprived shareholders of publicly listed Convoy of the right to vote against the sub-placing arrangements, and hindered the SEHK’s enforcement of the Listing Rules.

The SFC, the SEHK and the then publicly listed Convoy rendered full assistance to the ICAC during its investigation.

An ICAC spokesperson said that the ICAC will continue to maintain close cooperation with the SFC and other relevant regulatory bodies, working together to combat corruption and illegal activities in Hong Kong’s financial market. The ICAC is committed to upholding market integrity, fairness and a clean business environment, thereby reinforcing Hong Kong’s status as an international financial centre.

The prosecution was represented by Senior Public Prosecutors Human Lam and Ivan Shiu, assisted by ICAC officer Matthew Pan.