The Securities and Futures Commission (SFC), the Independent Commission Against Corruption (ICAC) and the Macao Judiciary Police jointly mounted an operation codenamed “Demarcation” on 19 and 20 August 2024 in relation to suspected cross-boundary fraud and misconduct. Senior executives of a listed company in Hong Kong were allegedly involved in fictitious transactions and false accounting totalling around HK$120 million.
Six premises were jointly searched by the SFC and the ICAC. During the joint operation, the ICAC also arrested seven persons, including the chairman and an executive director of the listed company.
The arrestees had allegedly committed the offence of agent using documents with intent to deceive his principal under the Prevention of Bribery Ordinance.
The investigation revealed that the chairman of the listed company and other individuals had allegedly falsified business documents and accounting records of the company’s subsidiaries in Hong Kong and Macao, while the company’s trade receivables totalling over MOP113 million (about HK$110 million) were reduced. Meanwhile, the individuals concerned had also allegedly used false documents and accounting records to conceal the misappropriation of the company’s funds over HK$9 million.
The above conduct may have resulted in the commission of offences or misconduct by the listed company and/or its management which contravene certain provisions under the Securities and Futures Ordinance for disclosing false or misleading information, as well as for defalcation, fraud, misfeasance, or other misconduct in relation to the conduct of the business or affairs of the listed company.
As cross-boundary crimes were involved in the case, the Macao Judiciary Police also launched an investigation into relevant individuals’ suspected fraud offences which took place in Macao. Simultaneous to the ICAC operation, the Macao Judiciary Police earlier kicked off the first-of-its-kind concurrent law enforcement action in Macao to search related premises and interview individuals concerned.
As the investigation is ongoing, no further comment will be made by the SFC and the ICAC.
The SFC’s Executive Director of Enforcement, Mr Christopher Wilson, said: “The SFC has zero tolerance when it comes to misconduct undermining the orderliness of the market and misconduct by management of listed companies. The joint action demonstrates the determination of law enforcement agencies in both jurisdictions to combat cross-boundary illegal activities involving listed companies. The SFC will continue to work closely with the ICAC and other local and extraterritorial law enforcement agencies to maintain market integrity and safeguard the interest of investors.”
The ICAC’s Deputy Commissioner and Head of Operations, Mr Ricky Yau Shu-chun, said: “The joint operation fully demonstrates the close collaboration and determination of the two cities’ law enforcement agencies in tackling cross-boundary corruption and other crimes to maintain a clean and fair business environment and effective operation of the financial market. The ICAC will continue to work with the SFC and other law enforcement agencies to curb corruption and other illegal activities and bring local and cross-boundary criminals to justice.”
