Hotpot restaurant duo charged by ICAC in $1.2m renovation fee fraud

Two former shareholders of a hotpot restaurant were charged by the ICAC today (January 8) for allegedly conspiring together to defraud the restaurant of $1.2 million by inflating its renovation fee.

Iong Chi-fai, 49; and Wen Hoi-tik, 43, both former shareholders of Peach Garden Catering Operation Limited (Peach Garden), face one count of conspiracy to defraud, contrary to the Common Law. The duo were released on ICAC bail, pending their appearance at the Kwun Tong Magistrates’ Courts tomorrow (January 9) for mention. The prosecution will apply to transfer the case to the District Court for plea.

At the material time, the duo were two of the shareholders of Peach Garden, overseeing its daily operations, while Wen’s shares in the company were held by his wife. All shareholders, including the two defendants, agreed to inject $6.6 million in total in Peach Garden to operate a hotpot restaurant. The duo were responsible for handling the renovation work of its hotpot restaurant, including sourcing a renovation contractor and negotiating the renovation fee with it.

The charge alleges that between August 2022 and June 2023, the duo had allegedly conspired together to defraud Peach Garden by falsely representing that the total costs of the renovation work of the hotpot restaurant were about $4 million, and that Iong had paid a renovation fee of $1.2 million to an engineering company on behalf of Peach Garden.

The ICAC investigation arose from a corruption complaint. Enquiries revealed that Iong did not pay any renovation fee on behalf of Peach Garden. It was alleged that by making the false representations, the two defendants had inflated the costs of the renovation work by $1.2 million and shared the money.

Peach Garden and the engineering company concerned rendered full assistance to the ICAC during its investigation into the case.