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Court verdict on fraud over secret backdoor listing

Issue date: 2024-12-09 19:19:12

The Securities and Futures Commission (SFC) welcomes the conviction by the District Court today of Mr Chim Pui Chung and his son Mr Ricky Chim Kim Lun of two counts of conspiracy to defraud Asia Resources Holdings Limited (Asia Resources), its board of directors and shareholders as well as the Stock Exchange of Hong Kong Limited (SEHK) over a secret backdoor listing arrangement concerning Asia Resources.

Their convictions arose from a prosecution brought by the Independent Commission Against Corruption (ICAC) following a referral by the SFC. Ms Wong Poe Lai was also convicted of one count of money laundering in the same case (Notes 1 to 3).

Specifically, in July 2013, Chim Pui Chung, Ricky Chim and Mr Ma Zhonghong agreed on a secret backdoor listing arrangement to sell Asia Resources to Ma through the placement of $535.5 million convertible notes by Asia Resources to nominees of Ma, including Wong. It was also agreed among the trio that Ma would pay Chim Pui Chung a sum of approximately $210 million to control 70 to 75% of the issued share capital of Asia Resources (Notes 4 and 5).

The SFC’s Executive Director of Enforcement, Mr Christopher Wilson, said: “We welcome the Court’s verdict which sends an unambiguous message to the public that no person should take advantage of their positions to enrich themselves at the expenses of minority shareholders. The SFC will continue to work closely with the ICAC to combat corporate crimes and maintain the integrity of Hong Kong’s capital market.”

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Notes:

1. The shares of Asia Resources (currently known as Zhong Jia Guo Xin Holdings Company Limited) have been listed on the Main Board of SEHK since 24 October 1997.
2. At the material time, Chim Pui Chung was the substantial shareholder of Asia Resources while Ricky Chim was the chairman and executive director of Asia Resources.
3. The reasons for verdict is available on the Judiciary’s website (DCCC439/2022).
4. Ma was a former chairman of Shenyang Public Utility Holdings Company Limited.
5. Please see ICAC’s press release for further details.

Source: SFC