Hong Kong Court Issues Charges ex-Director Tsang Chung-yu of Metaverse Yunji Technology Group (Zioncom) & 11 Individuals of Defrauding the Company to Grant $560,000 of Share Options in 2022, Conspired to Falsely Represent 10 Individuals Were Employees to Companies or Subsidiaries to Qualify for Share Options
30th October 2024 | Hong Kong
Hong Kong Court has issued charges against ex-independent Non-Executive Director Tsang Chung-yu of Metaverse Yunji Technology Group (Zioncom) & 11 individuals of defrauding the company to grant $560,000 of share options in 2022, conspiring to falsely represent 10 individuals were employees to Metaverse Yunji Technology Group (Zioncom) companies or subsidiaries to qualify for share options. ICAC (25/10/24): “The ICAC this morning (October 25) charged a former independent non-executive director of a delisted company and 11 others for allegedly conspiring to deceive the company into granting share options. The 12 defendants will appear at the Eastern Magistrates’ Courts this afternoon for mention. Tsang Chung-yu, 56, former independent non-executive director of Zioncom Holdings Limited (Zioncom); and 11 others associated with the scam, namely Chan Wai-lung, 43; Joyce Chan Oi-yan, 32; Chan Wai-sze, 48; Kenneth Chan Sze-chai, 54; Chow Ching-ho, 24; Chung Shing-yip, 37; Giles Lee Hung-kai, 61; Leung Lok, 23; Pui Li-ming, 40; Brian Wong King-lok, 32; and Eric Yeung (formerly Eric Yeung Ching-lap), 45, jointly face one count of conspiracy to defraud, contrary to the Common Law; and an alternative charge of conspiracy to deal with property known or believed to represent proceeds of an indictable offence, contrary to section 25(1) of the Organized and Serious Crimes Ordinance and section 159A of the Crimes Ordinance. In January 2018, Zioncom, principally engaged in manufacturing and sale of networking communication products, was listed on the Growth Enterprise Market Board of the Hong Kong Exchanges and Clearing Limited (HKEX). On October 21, 2022, Zioncom was renamed as Metaverse Yunji Technology Group Company Limited, and was eventually delisted from the HKEX on December 4, 2023. Since 2017, Zioncom adopted a share option scheme by granting share options of the company as a reward to its employees and other qualified individuals who had contributed to the company, so as to encourage them to contribute to the benefits of the company and its shareholders as a whole and to work towards enhancing the value of the company and its shares. The alleged offences took place between April and September 2022. At the material time, Tsang was an independent non-executive director of Zioncom. It is alleged that the 12 defendants had conspired together to falsely represent that Joyce Chan, Chan Wai-sze, Kenneth Chan, Chow, Chung, Lee, Leung, Pui, Wong and Yeung were employees of the company or its subsidiaries, with an intent to induce Zioncom to grant the aforesaid 10 defendants 66 million share options of the company. The alternative charge alleges that the defendants had conspired together to arrange the aforesaid 10 defendants who were granted share options of Zioncom to deal with the crime proceeds in relation to 66 million shares of Zioncom subscribed by the aforesaid share options, involving a total amount of over $4.35 million. The ICAC investigation commenced upon receipt of a corruption complaint, followed by an operation jointly mounted with the Securities and Futures Commission (SFC) in January this year. The SFC and the HKEX offered full assistance to the ICAC during its investigation. Hong Kong SFC (25/10/24): “Mr Tsang Chung Yu, a former independent non-executive director of Metaverse Yunji Technology Group Company Limited (Metaverse Yunji) and 11 other individuals were charged today in a fraud case involving the granting of share options following the joint operation of the Securities and Futures Commission (SFC) and the Independent Commission Against Corruption (ICAC) in January 2024 (Notes 1 and 2). Tsang and the others, appearing in the Eastern Magistracy for mention today, were charged for conspiracy to defraud by the ICAC, with an alternative charge of conspiracy to deal with property known or believed to represent proceeds of an indictable offence (Note 3). The total amount of suspected crime proceeds handled by them was approximately $4.35 million. Tsang allegedly conspired with others to defraud Metaverse Yunji between April and September 2022 by falsely representing that 10 of the 11 individuals were employees of the company, thereby inducing the company to grant 66 million share options to them (Note 3). The SFC will continue to collaborate with the ICAC on this matter.”
“ Hong Kong Court Issues Charges ex-Director Tsang Chung-yu of Metaverse Yunji Technology Group (Zioncom) & 11 Individuals of Defrauding the Company to Grant $560,000 of Share Options in 2022, Conspired to Falsely Represent 10 Individuals Were Employees to Companies or Subsidiaries to Qualify for Share Options “
Notes:
- Metaverse Yunji, known as Zioncom Holdings Limited at the material time, was delisted in December 2023.
- The 11 individuals are Mr Chan Wai Lung, Mr Chan Sze Chai, Mr Chow Ching Ho, Mr Lee Hung Kai, Mr Leung Lok, Mr Wong King Lok, Ms Chan Oi Yan, Mr Chan Wai Sze, Mr Chung Shing Yip, Ms Pui Li Ming and Mr Eric Yeung.
- Please see ICAC’s press release for further details.
Hong Kong Court Issues Charges ex-Director Tsang Chung-yu of Metaverse Yunji Technology Group (Zioncom) & 11 Individuals of Defrauding the Company to Grant $560,000 of Share Options in 2022, Conspired to Falsely Represent 10 Individuals Were Employees to Companies or Subsidiaries to Qualify for Share Options
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