The forces behind the “Sing Gao Bulk” Manufacturing Group gradually revealed that after taking joint action last month, the police and the Securities Regulatory Commission launched a second wave of operations yesterday to search the office of a listed company in Hong Kong and the residences of its senior personnel. A total of 4 men and women were arrested. Three of them were senior members of a listed company. On suspicion of conspiracy and fraud, four people have been arrested. Together with 12 people arrested last month, a total of 16 people have been arrested to assist in the investigation so far.
The police and the Securities Regulatory Commission investigated the market-building case and arrested four more people yesterday. Police commercial crime investigation department personnel, after conducting an in-depth investigation into the “Sing Gao Bulk” marketing fraud case, obtained information on people behind the fraud syndicate. The second wave of operations was launched yesterday, searching various locations across Hong Kong and arresting three men and one woman (26 to 63 years old) for investigation. The four suspects arrested included three senior officials of a listed company, suspected of conspiracy to misappropriate the company's funds through false transactions involving more than HK$19 million.
One of the locations that was searched by the police yesterday was the Heng Yi Holdings (01894-HK) office, and Heng Yi Holdings announced the suspension of trading yesterday. Heng Yi Holdings issued an announcement in the evening, saying that yesterday law enforcement authorities carried a search warrant in connection with an investigation to search the Group's office properties in Hong Kong. The company will fully cooperate with regulators and will issue further announcements in due course in accordance with relevant regulations; it will continue to suspend trading as time is needed to understand the current investigation and assess whether it has any impact on the Group's business and operations.
The social networking platform beauty tempts investment
Police said the joint operation not only demonstrated the cooperation between the police and the Securities Regulatory Commission in cracking down on complex and serious financial crimes, but also showed that the two sides are committed to protecting the public interest and maintaining the integrity, soundness and reputation of the Hong Kong financial market. The Securities Regulatory Commission stated that under the “Securities and Futures Regulations”, it is working with the police to conduct searches on crimes related to market manipulation and other market misconduct.
According to the news, they are suspected of carrying out a tight organization and a fine division of labor among members. They were suspected of carrying out market manipulation plans in the middle of last year. From time to time, they used beautiful avatars on online social networking platforms to induce retail investors to “drop” investments, touting that a company's stock was new, and that there would be large gains in Japan; in fact, they “sang high in bulk.” In August of last year, Heng Yi Holdings raised from 2.3 yuan to 6.25 yuan within 4 days. Then, on August 31, the stock dropped 89% in a single day, causing heavy losses to retail investors. It is commonly known as the “WeChat Girl” fraud case.
The incident aroused suspicion and intervention by the Securities Regulatory Commission. The police, together with CSRC personnel, carried out a joint operation codenamed “Perfect” on the 4th and 5th of last month. Over 160 personnel were dispatched to search 27 locations across Hong Kong, and arrested 7 men and 5 women (23 to 65 years old) during the operation, including suspected fraud syndicate leaders and their party members. They also seized more than 900 million yuan of cash, watches and gold bricks suspected to be criminal proceeds, and froze more than 8,000 accounts of more than 8,000 accounts yuan.
63 securities accounts involved in the case were frozen
It is known that fraud syndicates began operations in 2018, but only became active last year. Some securities accounts had a large number of unusual stock and transfer transactions within a short period of time. It is believed that lawbreakers have used criminal proceeds to conceal their origin through cross-border transfers. Currently, about 63 securities accounts involved in the case have been frozen. For the time being, it is impossible to count the total number of victims and the total amount defrauded.