December 19, 2017 / 11:52 AM / a year ago

HK firm Convoy sues 28 officials for financial losses

HONG KONG, Dec 19 (Reuters) - A Hong Kong company identified as part of a network of penny-stock firms whose share prices crashed massively in June said on Tuesday it had initiated legal action against 28 defendants for causing the firm substantial financial loss and damage.

The writ by Convoy Global Holdings Ltd was filed in Hong Kong’s High Court more than a week after Convoy appointed new senior officials to the company following the arrest by the anti-graft agency of three of its executive directors.

In the writ, Convoy said it was seeking unspecified damages, claiming the defendants were involved in a “gross breach of fudiciary duty and illegitimate diversion of the company’s funds” in relation to share placements in 2015 that raised HK$4.5 billion ($587 million).

Convoy, a financial services company, was featured in May by independent investor and stock commentator David Webb in a group dubbed the “Enigma Network”.

Several Enigma stocks plunged within minutes of each other on June 28 for no apparent reason, erasing over $6 billion in market capitalisation in a single day. Many shares lost more than half their value.

The defendants identified in the writ include officials from Convoy, Kaisa Group Holdings Ltd, China Green (Holdings> Ltd and firms owned by listed companies Interactive Entertainment China Cultural Technology Investments Ltd, Jun Yang Financial Holdings Ltd and Hong Kong Education (International) Investment Ltd.

It named Roy Cho as the first defendant. Reuters could not ascertain any contact details for Cho to seek comment.

Kaisa, China Green and Interactive Entertainment did not immediately respond to a request seeking comment. Jun Yang and Hong Kong Education declined to comment.

Earlier this month, the Independent Commission Against Corruption in the former British colony conducted its first ever joint operation with the markets’ watchdog, the Securities and Futures Commission, to arrest the three Convoy executive directors.

The trio, Wong Lee-man, Fong Sut-sam and Chan Lai-yee, were suspended by the company following their arrests and were all named in the writ as defendants. Reuters could not ascertain contact details for them to seek comment.

Trading in Convoy shares have been suspended since Dec. 7. (Reporting by Donny Kwok; Editing by Farah Master and Neil Fullick)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below