The Hong Kong Independent Commission Against Corruption prosecutes four auditors for conspiracy to commit fraud, assisting a Macau construction company in falsifying accounts to go public in Hong Kong

According to the Zhitong Finance APP, on May 6, the Hong Kong Independent Commission Against Corruption (ICAC) announced that last Friday (May 2), it filed charges against four audit and consulting personnel from the accounting firm HuiLian, who are suspected of preparing false auditor reports for the Macau construction company HuaJi Global (formerly listed under stock code: 02296) and conspiring to defraud the Hong Kong Exchanges and Clearing Limited (HKEX) to approve its listing application. The four are also suspected of conspiring with three relatives to conceal their identities in subscribing for placement shares during HuaJi Global's initial public offering (IPO). The seven defendants appeared in the Eastern Magistrates' Court on Wednesday (May 7). The related corruption investigation is still ongoing, and additional charges may not be ruled out. The four audit and consulting personnel are all charged with one count of conspiracy to commit fraud. At the time of the incident, Lin Rui Mei and Xiao Wan Shan were the Chief Auditor and Audit Manager, respectively, of HuiLian Accounting Firm Limited (HuiLian Accounting); while Chen Wei Lin and Huang Yi Zhong were the Assistant and Manager, respectively, of HuiLian Enterprise Consulting Limited (HuiLian Enterprise), a subsidiary of HuiLian Accounting. Among them, Xiao Wan Shan and Huang Yi Zhong are certified public accountants. The four, along with three relatives, are also charged with one count of conspiracy to commit fraud. The three relatives are Lin Rui Mei's husband Li Wen Xiang, her uncle Li Jian She, and Huang Yi Zhong's sister Huang Ying Wen, aged between 46 and 50. The seven defendants have been granted bail by the ICAC, and the case will be heard again tomorrow (May 7) in the Eastern Magistrates' Court. The prosecution will later apply to refer the case to the District Court for plea. At the time of the incident, HuaJi Global Group Holdings Limited (HuaJi Global) was a construction company based in Macau. HuaJi Global appointed HuiLian Accounting in October 2016 as its reporting accountant to prepare an auditor's report for its application to list on the main board of the HKEX. The four audit and consulting personnel involved were assigned to prepare the report and conduct audit work on HuaJi Global's financial status from January 2016 to April 2019. HuaJi Global's listing application was approved by the 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. HuaJi Global was subsequently delisted in September 2023. One of the charges alleges that the four audit and consulting personnel conspired with the chairman of HuaJi Global and others to defraud HuiLian Accounting's directors and the HKEX between October 2016 and November 2019, falsely representing that the auditor's report prepared by them accurately reflected HuaJi Global's financial status, leading the HuiLian Accounting director to endorse the report and submit it to the HKEX, resulting in the HKEX approving HuaJi Global's application for listing on the main board. Another charge alleges that between October 2019 and April 2021, the four audit and consulting personnel conspired with the three relatives and the chairman of HuaJi Global to defraud GaoZheng Securities, causing GaoZheng Securities to allocate a total of 5,888,000 shares of HuaJi Global's placement shares to Li Jian She, Huang Ying Wen, and others. The individuals involved are suspected of falsely claiming that Li Jian She, Huang Ying Wen, and others were the ultimate beneficial owners of the allocated HuaJi Global placement shares, that they were independent of HuaJi Global, and that they were not funded by HuaJi Global or acted under HuaJi Global's instructions to acquire or sell the placement shares The Hong Kong Independent Commission Against Corruption (ICAC) received a corruption complaint and launched an investigation, subsequently taking joint action in November 2021 with the Accounting and Financial Reporting Council (formerly known as the Financial Reporting Council) and the Macao Commission Against Corruption (Macao ICAC). The investigation found that four involved audit and consulting personnel were suspected of preparing false accounting reports for Huaji Global to show stable business growth, assisting the company in applying for a listing on the main board of the Hong Kong Stock Exchange. The chairman of Huaji Global was later suspected of providing HKD 1.5 million in remuneration to the relevant audit and consulting personnel and their families for subscribing to the placement shares in Huaji Global's initial public offering. The related corruption investigation is still ongoing, and the ICAC will seek further legal advice from the Department of Justice, not ruling out additional charges against the involved parties or prosecuting other individuals involved