香港特別行政區 訴 麥光耀,陳麗兒,黃淑安,李易明

On 5 November 2025, the Court of Final Appeal allowed the prosecution's appeal in HKSAR v Mak Kwong Yiu, Chan Lai Yi, Wong Suk On and Lee Yik Ming (FACC 1/2025), restoring the four defendants' convictions for conspiracy to defraud. Senior Public Prosecutor Ms Lam Hiu Man and Senior Public Prosecutor Mr Shao Kwan Tai acted for the successful applicant (Department of Justice).

The case arose from bond placements by Convoy Financial Holdings Ltd (CFHL), a Hong Kong-listed company. The first defendant was CFHL's executive director; the second and third defendants were senior accounting and reporting staff; the fourth defendant was general manager of Gransing Securities. CISL, in which three CFHL directors (including the first defendant) held indirect interests, was a connected person of CFHL under the Listing Rules. Rather than appointing CISL directly as placing agent, the defendants arranged for CFHL to appoint Gransing, which then appointed CISL as sub-placing agent. CISL placed all the bonds and received roughly HK$50.8 million in commissions, about 98.5% of what Gransing received. The board and the Stock Exchange were never told about the sub-placement arrangements.

The District Court judge convicted all four defendants on Count 1 (conspiracy to defraud CFHL, its board, shareholders and potential investors) and the first three defendants on Count 3 (conspiracy to defraud the SEHK). The Court of Appeal quashed the convictions, holding that the prosecution had to prove the placement/sub-placement arrangements were "sham" transactions under Snook v London and West Riding Investments Ltd, and that they were not connected transactions because the agreements on their face were between CFHL and Gransing, not CFHL and CISL.

The Court of Final Appeal held that:

(1) The prosecution did not need to prove the arrangements were connected transactions. The dishonesty lay in concealing CISL's role as actual placing agent, which had two objectionable aspects: the directors' conflicts of interest, and the circumvention of independent non-executive directors' and the SEHK's scrutiny under the connected transaction regime (§§4-7, 26).

(2) The Court of Appeal erred in requiring proof of "sham" under Snook. In a conspiracy to defraud prosecution, Adams v The Queen establishes that concealment of directors' breaches of fiduciary duty can ground such a charge without resort to the Snook concept of sham (§§10-15).

(3) Even if connected transaction status had to be proved, the arrangements were connected transactions. Applying the Ramsay principle from Arrowtown Assets Ltd, the CFHL-Gransing and Gransing-CISL agreements formed a composite transaction whose true effect was CFHL appointing CISL as sole placing agent (§§106-123).

(4) Non-disclosure of conflicts of interest was sufficient to support the conspiracy to defraud charge, given the scale of the indirect interests held by three CFHL directors in CISL and the resulting transfer of over HK$25 million from CFHL to CISL (§§124-128).

The Court unanimously allowed the appeal, set aside the Court of Appeal's judgment, and restored the convictions and all orders made by the District Court on 16 October 2021.

Why it matters

Practitioners advising listed companies should expect prosecutors to charge conspiracy to defraud based on concealment of a connected person's role in corporate transactions, without first having to prove the arrangements were sham or even connected transactions under the Listing Rules. The judgment also confirms that the Ramsay composite-transaction approach, developed in tax cases, applies to interpreting "transaction" in Chapter 14A of the Listing Rules, meaning intermediate entities inserted without commercial purpose can be disregarded. For defence practitioners, the Court rejected the argument that breach of fiduciary duty alone is insufficient for criminal liability, but accepted that the prosecution must still prove dishonesty under the Ghosh test and an actual or risked economic loss to the company or impediment to a public authority.