News

Tradelink (0536): we've been punting surplus cash in the markets and oops
Company announcement, 20-May-2022
Companies should distribute surplus capital to investors, not play the markets themselves.
HKICPA fines Francis Cheng Hong Cheung, Gabriel Chan Shek Chi and Cheng & Cheng Ltd
HKICPA, 20-May-2022
For bad work on the 2014 audit of Sinofortune Financial (8123). This is the 4th fine in 3 years for the firm and the 2nd in a year for Mr Chan.
Winding up of Nerico Brothers Ltd
HK Court of First Instance, 19-May-2022
The petitioner, Target Insurance Co Ltd, is owed over US$154m (HK$1203m). The petitioner is owned by Target Insurance (Holdings) Ltd (6161), the shares of which have been suspended from trading since 5-Jan-2022. The amount represents about 188% of the group's net assets at 30-Jun-2021. Nerico says it has been trying to recover the money from "Four Dimensions Global Strategy Fund".
Censure/criticism of Prosper One (1470) and 9 directorsAnnouncement, 23-Jul-2019
SEHK, 18-May-2022
We note that INED Michael Lee Chun Keung is a HK Legislator and Vice Chairperson of the Liberal Party, while former INED Michael Chan Yee Ping is still an INED of 4 other companies which should consider whether to retain him.
Criticism of 2 EDs of CIL (0479)
SEHK, 17-May-2022
For internal control deficiencies in the group's money-lending business, for which they were responsible.
Tianyun (6836): PwC quits as auditor at board's request after problems with bank confirmations and possible "unauthorised transactions"Elite Partners adviserhips
Company announcement, 16-May-2022
They are replaced by Elite Partners CPA Ltd, whose track record of HKICPA disciplinary sanctions and returns to shareholders of clients after their appointment speaks for itself.
Target Insurance Co Ltd v Mr Ng Yu & others
HK Court of First Instance, 13-May-2022
The plaintiff, now under managers appointed by the Insurance Authority, alleges a "massive fraud perpetuated" (sic) by Mr Ng Yu and Jerff Lee Cheuk Fung and that Mr Ng is the "central figure in the fraudulent scheme". Mr Ng is Chairman of both Target Insurance (Holdings) Ltd (6161) and Amber Hill Finance (0033). The insurer deposited funds with Nerico Brothers Ltd which were allegedly "dissipated to various corporate vehicles owned by" Mr Ng, including Neo Tech Inc and Amber Hill Capital Ltd.
Re Allied Weli Development Ltd
HK Court of Appeal, 13-May-2022
The applications of Eugene Chuang Yue Chien and 5 others to appeal a judgment and order for production of documents and private examination is refused. The liquidators are trying to discover what happened to over HK$2.8bn of net assets in the "impugned transactions". Unfortunately, the judgment to which this refers, [2021] HKCFI 1247, and a decision of that judge also refusing leave to appeal, [2021] HKCFI 2968, are not available.
Man charged with HK$125m money laundering involving loans from Sunway (0058)
ICAC, 11-May-2022
We note that the defendant, Lam Chung Kan (aka Lin Songgen), was also the purported owner of the subscriber in a 20% general mandate issue in March 2019. 4 weeks later, he flipped most of those shares to Oscar Chim Sai Yau. In today's charges, Mr Lam was the "personal assistant of a businessman" who is not named, and the alleged 5 bad loans from Sunway to the businessman occurred between 2015 and 2017. We have no idea who the businessman is.
KPMG, Jacky Muk Chung Wing and Wong Sau Ling fined for non-compliance with professional standards
HKICPA, 11-May-2022
This was a pretty basic mistake on the 2015 audit of China Environmental Technology and Bioenergy (1237), which failed to correctly adjust EPS for a bonus issue and open offer. Ms Wong was also fined in Dec-2019 and Jun-2021, so this is her third sanction in under 3 years.
HK is running out of time to re-join the World
Webb-site.com, 5-May-2022
As our Editor sits in the air-lock waiting to re-enter HK, he looks at the now-unconstitutional quarantine regulations and the harm they are doing to HK.
HKICPA fines Charles Chan Wai Dune, Delores Teh Eng Hua, Yau Hok Hung & CCIF CPA Ltd
HKICPA, 5-May-2022
For bad audit work on the 2005-2007 accounts of First Natural Foods (1076), now reborn as Imperial Pacific International Holdings Ltd. The main subsidiary of the Fujianese eel producer turned out to have 2 sets of accounts and there were forged sales. Ever alert, It took 7 years until the Financial Reporting Council received a complaint "from a regulator" (probably SFC) and another 3.5 years until they issued a report and sent it to the HKICPA in Nov-2018. We note that Mr Chan and his firm were previously fined by HKICPA in 2010 in a separate case.
CPA charged with theft of USD1.25m from client companies
ICAC, 3-May-2022
We note that in 2020, defendant Charles Cheung Hing Chik was declared bankrupt in relation to the monies he owed one of the two companies involved, Ling Sing Ltd.
Calvin Choi Chi Kin v SFCHiding behind the cornerstones
SFAT, 29-Apr-2022
The Chairman & CEO of AMTD applies for anonymity in his appeal and is refused. The SFC has ordered him banned for 2 years for breaches of the Code of Conduct. The substantive appeal will be heard later. The subject matter appears to relate to our article "Hiding behind the cornerstones" of 3-Oct-2016.
Ex-AIA District Manager guilty of fraud over signing fee
ICAC, 28-Apr-2022
She received a signing-on fee of HK$860k by inflating her income at the previous insurer by HK$1.5m. We note that signing fees and high commissions are a common practice in this industry, in which salespeople are not so much selling you a product as selling you to the insurer.
Ex-Manulife regional director charged by ICAC with fraud for taking out dummy policies
ICAC, 28-Apr-2022
10 life insurance policies involved commissions of HK$1.09m, including $340k to the defendant and $750k to 2 downline staff, yet again underlining the inefficiency of this savings product.
Former director of audit firm charged with theft
ICAC, 27-Apr-2022
Chung Chi Hang was a director and 50% owner of Larry Brendon CPA Ltd. Webb-site records that in March 2021 he was banned for a year by the HKICPA for bad audit work on 5 companies.
HKICPA bans Li Sau Ying for 3 years
HKICPA, 27-Apr-2022
She issued modified audit reports, including a disclaimer of opinion, "in a deliberate attempt to avoid performing the necessary audit work". In 2019, she admitted the complaints, then in 2020 she withdrew her admission, then she appealed to the Court of Appeal against this order, and her appeal was dismissed in March 2022.
HKICPA bans Chan Chung Mo for 18 months, fines him HK$50k
HKICPA, 25-Apr-2022
He provided an incomplete client list and false and misleading answers during a practice review.
Ms Leung Yuk Kit v SFC
SFAT, 25-Apr-2022
This preliminary ruling confirms that the SFC's announcement of 18-Feb-2021 to freeze 54 accounts at 13 brokers relates to an alleged pump & dump scheme on Macau E&M (1408) as we said a the time.
Two senior executives of construction companies charged by ICAC in HK$75.3m L/C scam found guilty
ICAC, 23-Apr-2022
Including a senior executive of a subsidiary of China Railway Construction (1186).
KPMG Partner Irene Chu Ngar Yee fined HK$100k for non-compliance with professional standards
HKICPA, 22-Apr-2022
Awkward: we note that she is a Govt-appointed member of the Financial Reporting Review Panel, which investigates HK-listed companies for non-compliance with financial reporting requirements.

Our stories

HK is running out of time to re-join the World
As our Editor sits in the air-lock waiting to re-enter HK, he looks at the now-unconstitutional quarantine regulations and the harm they are doing to HK. (5-May-2022)
A manifesto for Hong Kong
If you're going to be Chief Executive and you don't have a manifesto or any policy expertise beyond Security, Webb-site is here to help! (13-Apr-2022)
Employment Support Scheme: the final outcome
After information requests by Webb-site, we reveal that HK's largest ever corporate handout went over-budget by about HK$10bn to a final tally of HK$90.5bn (US$11.6bn) plus costs. We produce a final list of approved claims. (13-Feb-2022)
Yorkey (2788): a successful outcome
Webb-site recommends shareholders to vote in favour of the increased offer, as founder David Webb has undertaken to do. Here's the background to our decision. (20-Jan-2022)
Joining the dots on the ICAC case against Chim Pui Chung and others
The ex-legislator is once again facing criminal charges, this time with his son and others. We examine the past connections between the defendants and the connection between an alleged co-conspirator and one of the subscribers of convertible notes, who has not been charged. (21-Nov-2021)
Raising the Yorkey bar
What are we going to do about the proposed privatisation of Yorkey (2788)? (21-Oct-2021)
Observations on Next Digital (0282)
A Financial Inspector has not been appointed in HK since last century, before the SFC gained new powers under the SFO in 2003. Now, Financial Secretary Paul Chan, who will neither confirm nor deny plans to run for CE, is throwing this redundant tool at Next Digital. (28-Jul-2021)
30 years in Hong Kong
This seems like a suitable time for an update from our founder. (15-Jul-2021)
Carrie Lam, Broadcaster-in-Chief
Contradicting a 2018 statement to LegCo, the HK Govt is now in the TV distribution business, removing competition and exclusivity by buying the Tokyo Olympics with your tax dollars and sublicensing them for free, risking a thinning-out of coverage. What next? (11-May-2021)
SFC launches Govt welfare scheme for property tycoons
Well, not all tycoons, only larger ones. (10-May-2021)
The long-awaited Law Reform Commission report on an archives law
With RTHK, a Government Department, currently destroying its online archives, we asked the LRC why there has been no report 26 months after a consultation on an archives law closed. Here is their response. (6-May-2021)
How to end HK's border lockdown
HK's economic recovery depends on fully re-opening its borders, but it can't when so few have been vaccinated. With near-zero COVID, we must use other vaccination incentives. We propose a 4-pronged solution, including a VacciLottery and an inbound travel exemption. (27-Apr-2021)
Government misled LegCo over HKIDs
A quick Sunday search using a single popular name finds 8 pairs of matching masked HKIDs in the Companies Registry. There must be hundreds or thousands of other such pairs on other names - yet the Government claimed on Friday that it could only find 8 in the entire database. (Updated 13-Apr). (12-Apr-2021)
HK's inbound quarantine laws: dangerous, irrational and unconstitutional
We put our microscope on HK's inbound quarantine laws and find that the 21-day length of quarantine actually increases the risk to the community, Further, the ban on arrivals from 4 countries is irrational. Both fail to satisfy constitutional tests of proportionality. (16-Mar-2021)
The Budget and HK's Road to Serfdom
The so-called "Consumption Voucher" will probably become another cash handout, a total of HK$108bn over 2 years - but that's not the point. HK's budget has long since deviated from the Basic Law requirement to keep the budget in line with Gross Domestic Product over time, having expanded by over a quarter since the 1997 Handover. HK is becoming a tax-and-spend interventionist economy, departing from the free-market principles at the root of its success. (26-Feb-2021)

Other news

Tradelink (0536): we've been punting surplus cash in the markets and oops
Company announcement, 20-May-2022
Companies should distribute surplus capital to investors, not play the markets themselves.
HKICPA fines Francis Cheng Hong Cheung, Gabriel Chan Shek Chi and Cheng & Cheng Ltd
HKICPA, 20-May-2022
For bad work on the 2014 audit of Sinofortune Financial (8123). This is the 4th fine in 3 years for the firm and the 2nd in a year for Mr Chan.
Winding up of Nerico Brothers Ltd
HK Court of First Instance, 19-May-2022
The petitioner, Target Insurance Co Ltd, is owed over US$154m (HK$1203m). The petitioner is owned by Target Insurance (Holdings) Ltd (6161), the shares of which have been suspended from trading since 5-Jan-2022. The amount represents about 188% of the group's net assets at 30-Jun-2021. Nerico says it has been trying to recover the money from "Four Dimensions Global Strategy Fund".
Censure/criticism of Prosper One (1470) and 9 directorsAnnouncement, 23-Jul-2019
SEHK, 18-May-2022
We note that INED Michael Lee Chun Keung is a HK Legislator and Vice Chairperson of the Liberal Party, while former INED Michael Chan Yee Ping is still an INED of 4 other companies which should consider whether to retain him.
Criticism of 2 EDs of CIL (0479)
SEHK, 17-May-2022
For internal control deficiencies in the group's money-lending business, for which they were responsible.
Tianyun (6836): PwC quits as auditor at board's request after problems with bank confirmations and possible "unauthorised transactions"Elite Partners adviserhips
Company announcement, 16-May-2022
They are replaced by Elite Partners CPA Ltd, whose track record of HKICPA disciplinary sanctions and returns to shareholders of clients after their appointment speaks for itself.
Target Insurance Co Ltd v Mr Ng Yu & others
HK Court of First Instance, 13-May-2022
The plaintiff, now under managers appointed by the Insurance Authority, alleges a "massive fraud perpetuated" (sic) by Mr Ng Yu and Jerff Lee Cheuk Fung and that Mr Ng is the "central figure in the fraudulent scheme". Mr Ng is Chairman of both Target Insurance (Holdings) Ltd (6161) and Amber Hill Finance (0033). The insurer deposited funds with Nerico Brothers Ltd which were allegedly "dissipated to various corporate vehicles owned by" Mr Ng, including Neo Tech Inc and Amber Hill Capital Ltd.
Re Allied Weli Development Ltd
HK Court of Appeal, 13-May-2022
The applications of Eugene Chuang Yue Chien and 5 others to appeal a judgment and order for production of documents and private examination is refused. The liquidators are trying to discover what happened to over HK$2.8bn of net assets in the "impugned transactions". Unfortunately, the judgment to which this refers, [2021] HKCFI 1247, and a decision of that judge also refusing leave to appeal, [2021] HKCFI 2968, are not available.
Man charged with HK$125m money laundering involving loans from Sunway (0058)
ICAC, 11-May-2022
We note that the defendant, Lam Chung Kan (aka Lin Songgen), was also the purported owner of the subscriber in a 20% general mandate issue in March 2019. 4 weeks later, he flipped most of those shares to Oscar Chim Sai Yau. In today's charges, Mr Lam was the "personal assistant of a businessman" who is not named, and the alleged 5 bad loans from Sunway to the businessman occurred between 2015 and 2017. We have no idea who the businessman is.
KPMG, Jacky Muk Chung Wing and Wong Sau Ling fined for non-compliance with professional standards
HKICPA, 11-May-2022
This was a pretty basic mistake on the 2015 audit of China Environmental Technology and Bioenergy (1237), which failed to correctly adjust EPS for a bonus issue and open offer. Ms Wong was also fined in Dec-2019 and Jun-2021, so this is her third sanction in under 3 years.
HKICPA fines Charles Chan Wai Dune, Delores Teh Eng Hua, Yau Hok Hung & CCIF CPA Ltd
HKICPA, 5-May-2022
For bad audit work on the 2005-2007 accounts of First Natural Foods (1076), now reborn as Imperial Pacific International Holdings Ltd. The main subsidiary of the Fujianese eel producer turned out to have 2 sets of accounts and there were forged sales. Ever alert, It took 7 years until the Financial Reporting Council received a complaint "from a regulator" (probably SFC) and another 3.5 years until they issued a report and sent it to the HKICPA in Nov-2018. We note that Mr Chan and his firm were previously fined by HKICPA in 2010 in a separate case.
CPA charged with theft of USD1.25m from client companies
ICAC, 3-May-2022
We note that in 2020, defendant Charles Cheung Hing Chik was declared bankrupt in relation to the monies he owed one of the two companies involved, Ling Sing Ltd.
Previously on Webb-site.com
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