Hong Kong's Independent Commission Against Corruption (ICAC) prosecutes four auditors for conspiring to commit fraud and helping a Macau construction company to falsify accounts for listing in Hong Kong.

On May 6, the Independent Commission Against Corruption (ICAC) of Hong Kong announced that four audit and advisory personnel from the accounting firm Hoi Lun were charged with preparing false audit reports for Huarchi Global, a Macau construction company (deregistered pre-listing number: 02296), in a conspiracy to deceive the Hong Kong Exchanges and Clearing Limited (HKEX) into approving its listing application. The four individuals were also accused of conspiring with three relatives to conceal their identities and subscribe to shares in Huarchi Global's initial public offering (IPO). The seven defendants appeared in the Eastern Magistrates' Court on Wednesday (May 7). The investigation into corruption is ongoing, and additional charges are not ruled out. The four audit and advisory personnel involved were charged with conspiracy to defraud. At the time of the incident, Lam Sui Mei and Siu Yuen Shan were respectively the chief auditor and audit manager of Hoi Lun Accounting Limited (Hoi Lun Accounting); while Chan Wai Lun and Wong Yat Chung were assistant and manager of Hoi Lun Consulting Limited (Hoi Lun Consulting), a sister company of Hoi Lun Accounting. Siu Yuen Shan and Wong Yat Chung are both registered accountants. In addition to the charge of conspiracy to defraud, the four individuals and three relatives were also charged with conspiracy to defraud. The three relatives are Lam Sui Mei's husband Lee Man Cheung and uncle Lee Kin Shek, as well as Wong Yat Chung's sister Wong Wing Man, aged between 46 and 50. The seven defendants were granted bail by the ICAC and will appear in court again on May 7 in the Eastern Magistrates' Court. The prosecution will later apply to transfer the case to the District Court for trial. At the time of the incident, Huarchi Global Holdings Limited (Huarchi Global) was a Macau construction company. In October 2016, Huarchi Global engaged Hoi Lun Accounting to act as its reporting accountant and prepare audit reports for its application to list on the main board of HKEX. The four audit and advisory personnel involved were assigned to prepare the report and conduct audits of Huarchi Global's financial position from January 2016 to April 2019. Huarchi Global's listing application was approved by HKEX in October 2019, and the company conducted its IPO in November of the same year, with Gaozheng Securities Limited (Gaozheng Securities) being one of the placement agents. Huarchi Global was subsequently delisted in September 2023. One of the charges alleges that the four audit and advisory personnel conspired with the chairman of Huarchi Global from October 2016 to November 2019 to defraud the board of Hoi Lun Accounting and HKEX by falsely representing in the audit report prepared by them that accurately reflected Huarchi Global's financial position, causing the director of Hoi Lun Accounting to endorse the report and submit it to HKEX, leading to the approval of Huarchi Global's application for listing on the main board. Another charge alleges that from October 2019 to April 2021, the four audit and advisory personnel conspired with the three relatives and the chairman of Huarchi Global to defraud Gaozheng Securities, resulting in Gaozheng Securities issuing a total of 5,888,000 shares of Huarchi Global to Lee Kin Shek and Wong Wing Man. The individuals in question are suspected of falsely claiming that Lee Kin Shek and Wong Wing Man were the ultimate beneficial owners of the allotted shares of Huarchi Global, independent of Huarchi Global, and were not individuals funded by Huarchi Global or instructed by Huarchi Global to purchase or sell the allocated shares. The ICAC received a corruption complaint and initiated an investigation, which later collaborated with the Financial Reporting Council (formerly the Financial Reporting Council) and the Corrupt Practices Investigation Bureau of Macau (Macao CPIB) in November 2021. The investigation found that the four audit and advisory personnel involved were suspected of preparing false audit reports for Huarchi Global to show stable growth in its operations in order to aid the company's application for listing on the main board of HKEX. The chairman of Huarchi Global was later accused of providing a payment of HK$1.5 million to the relevant audit and advisory personnel and their family members for subscribing to the allotted shares in Huarchi Global's IPO. The corruption investigation is ongoing, and the ICAC will seek further legal advice from the Department of Justice, and does not rule out adding charges against the individuals involved or prosecuting other suspects.