HKEX Vetting Official Charged With $1.2 Million in Bribes
The corruption scandal occurred against the backdrop of the Hong Kong bourse’s growth over the past few years as a top listing destination.
A senior executive of Hong Kong Exchanges and Clearing allegedly accepted HK$9.5 million ($1.2 million) in bribes for backing IPO applicants.
Eugene Yeoh Kim-loong, who formerly co-headed the vetting team of the listing department at the HKEX, was charged by the anti-corruption watchdog on Wednesday for bribery and misconduct.
The Independent Commission Against Corruption (ICAC) asserted that Yeoh, who was arrested in June, had taken bribes between 2017 and 2019 for favorable review of the application of Shen You Holdings Ltd. (HKEX: 8377). Richard Lum Chor-wah, the consultant who handled IPOs, transferred the money to Yeoh's wife, the ICAC said, as cited by the South China Morning Post. Lum has been charged with offering an advantage to a public servant.
The corruption scandal occurred against the backdrop of the Hong Kong bourse's growth over the past few years as a top listing destination for major Chinese companies that previously looked to Wall Street. The market has relaxed its rules over the past two years, allowing pre-profit and dually-listed companies to enter. After Alibaba's (NYSE: BABA; HKEX: 9988) listing in November, a number of other U.S.-listeds launched talks with the HKEX, though the coronavirus had postponed some.
Now, the Stock Exchange of Hong Kong is encouraging online IPO ceremonies, especially after a guest at the trading debut of SG Group Holdings Ltd. (HKEX: 1657) last Friday has tested positive on COVID-19, as reported by Caixin Global.
Loss-making manufacturer of sewing threads, Shen You last closed on Tuesday at 5 Hong Kong cents per share in trading. It was not traded over the last two days. It has a market value of about $5.2 million and the vast majority of its stock is held by individual insiders, according to a Simply Wall Street report.