Middleman charged by ICAC for offering $400,000 in bribes to accounting firm staff over fabric manufacturer’s listing

The ICAC today (April 14) charged a middleman for allegedly offering cash bribes totalling $400,000 to two then managers of an accounting firm in 2010 to assist a fabric manufacturer in its listing in Hong Kong.

The ICAC received a referral from the Securities and Futures Commission (SFC) in late March 2010. At the material time, the defendant had left Hong Kong. She was arrested by the ICAC upon her recent return. After seeking legal advice from the Department of Justice, the ICAC charged the defendant today.

Chan Chau-wan, 72, faces two counts of offering an advantage to an agent, contrary to section 9(2)(a) of the Prevention of Bribery Ordinance. She was released on bail, pending her appearance at the Eastern Magistrates’ Courts tomorrow (April 15) for mention. The prosecution will apply to transfer the case to the District Court for plea.

At the material time, Hontex International Holdings Company Limited (Hontex) was seeking a listing in Hong Kong. Hontex engaged KPMG for its auditing services through the introduction of the defendant. A senior manager and an assistant manager of KPMG were responsible for providing auditing services to the initial public offering (IPO) project for Hontex. Hontex was listed on the Main Board of the Stock Exchange of Hong Kong Limited (SEHK) in late December 2009. It was subsequently delisted in September 2013.

The two offences allege that on February 20, 2010, the defendant offered cash bribes of $300,000 and $100,000 respectively to the senior manager and the assistant manager of KPMG for providing auditing services to facilitate the IPO of Hontex.

The assistant manager of KPMG rejected the offer and reported the matter to KPMG. Following an internal investigation by KPMG, the matter was reported to the SFC, which subsequently referred the case to the ICAC.

KPMG, the SFC and the SEHK rendered full assistance to the ICAC during its investigation into the case.

The ICAC has been working closely with relevant regulators, including the Hong Kong Exchanges and Clearing Limited and the SFC, to ensure that IPOs are fair and equitable through system controls and preventive education. The ICAC is committed to upholding the integrity of our financial market as well as consolidating Hong Kong’s status as a leading international financial centre.