Hall of Shame

Consumer Discretionary

Gold Wo International Holdings (0090 HK re-used)

Year: 2003


Gold Wo International Holdings Limited was a Hong Kong Company who manufactured and sold household products made of melamine and silicon rubber including tableware, ashtrays, soap dishes and clocks.  The Company also manufactured and sold silicon rubber keypads.

The company listed on the Hong Kong Stock Exchange (HKEx) in December 2001 and raised HK$50M in its IPO.  In July 2002, an additional share offering raised HK$5.28M.

December 24, 2002, The company announced that three executive directors, two members of senior staff and a sales executive of the Company were involved in an investigation of the Independent Commission Against Corruption (ICAC) for alleged bribery scam in relation to listing of the shares of the Company on the Stock Exchange. It also announced that two Independent directors also resigned.

Some executive directors and executive staff of three companies listed on the HKEx; Yue Fung International Group Holding Limited, Gold Wo International Holdings Limited and Fu Cheong International Holdings Limited, together with a number of other people including an accountant, a financial consultant, a senior manager of an accounting firm, and a director and an owner of other companies, were arrested by the ICAC for alleged false accounting and bribery in relation to the listing of the three companies. 

July 14, 2003 Five persons, including the former chairman and vice-chairman of the Gold Wo, were charged by the ICAC for alleged conspiracy to defraud over the listing of the company and applications for Letters of Credit (L/C) totalling over $290 million.  Firstly they were alleged to have falsified sales invoices and accounting records to inflate the turnover and profit figures of Gold Wo and its subsidiaries for the financial years of 1998,1999 and 2000 to satisfy the listing requirements of the Stock Exchange. The charge also alleged them of misrepresenting the financial position of Gold Wo and its subsidiaries for the above financial years published in the prospectus of Gold Wo, and
submitted documents containing the inflated turnover and profit figures, thereby inducing the Stock Exchange to approve Gold Wo's application for listing on the Stock Exchange. 

The second charge alleged of conspiring to defraud shareholders, investors and creditors of Gold Wo and its subsidiaries and Stock Exchange by dishonestly misrepresenting the sales turnover and profit figures of Gold Wo in its Annual Report for the financial year ended 2001. 

The remaining two charges alleged of conspiring to defraud a number of banks by dishonestly causing Yue Fung Development Company Limited, Gold Wo Melamine Product Company and Richlink Asia Limited to apply for Letters of Credit in favour of various companies (the beneficiary companies).  They were said to have submitted false documents to the banks, which purportedly evidenced genuine underlying commercial transactions between the applicants and the beneficiary companies. It was alleged that the banks were caused to release $184,638,161 and $105,399,425 respectively to the beneficiary companies under the said L/Cs. The alleged offences took place between November 1998 and December 2002.

August 19, 2003 Fu Chu-kan, 46, former chairman of Gold Wo and Li Wing-kei, 37, certified public accountant, faced an additional charge of conspiracy to steal over $23 million from Gold Wo.

September 28, 2004 Gold Wo was delisted from the HKEx.

March 28, 2007 Fu Chu-kan, former Gold Wo chairman, and Li Wing-kei, certified public accountant, were each jailed for 10 years. Fu Yin-ling, former Gold Wo vice-chairman, and Lo Chun-nam, former Gold Wo director, were each jailed eight years.  The court also ordered that the defendants be disqualified from being company directors for a duration same as their terms of imprisonment.

August 24, 2018 The Hong Kong Institute of Certified Public Accountants (HKICPA) reprimanded and fined EY HK$400,000, Kwok Chee Tack HK$200,000 and Kelvin Wong Kam-man HK$100,000 for their failures in acting as the auditors for the three companies. EY, Kwok and Wong will also have to pay legal costs for the proceedings at a combined HK$1.53 million, the accounting body said.  

The three companies involved were Gold Wo International Holdings, electronic circuit-board maker Fu Cheong International Holdings and digital-camera maker Yue Fung International Group Holding. Yue Fung held 20 per cent of Gold Wo and indirectly held 14 per cent of Fu Cheong.   The HKICPA said EY, formerly Ernest &Young, was the auditor for the flotations of these companies between 1997 and 2002. Wong was the “engagement partner” of Gold Wo and Kwok the engagement partner of Fu Cheong and Yue Fung.


Gold Wo: Announcement, 20 Dec 2002
ICAC: Former chairman and four others charged for alleged fraud, 14 Jul 2003
ICAC: Duo face additional charge for allegedly stealing $23m, 19 Aug 2003
ICAC: Accountant arrested and charged for alleged fraud, 17 Dec 2003
Webb-Site: Toxic IPOs in HK, 26 Mar 2005
SCMP: Gold Wo officials jailed for fraud, 29 Mar 2007
HKICPA: HKICPA Takes Disciplinary Action, 24 Aug 2018
SCMP: A/C giant EY and two partners fined for auditing failures during HK listing procedures, 24 Aug 2018
Gold Wo: Annual Report YE  Mar. 2001
Gold Wo: Prospectus
HKEX: Gold Wo Filings 


 

Auditors

Company From To
Ernst & Young 30-Mar-01 9-Mar-04
RSM 16-Mar-04 30-Sep-04

Advisors

(IPO - Initial Public Offering, ASO - Additional Share offerings)

Type Date Role Party
ASO-1 12-Jul-02 Joint Lead Managers-Books Taiwan Concord Capital Securities HK Ltd
ASO-1 12-Jul-02 Joint Lead Managers-Books Great China Brokerage Ltd
IPO 12-Apr-01 Auditor(s) Ernst & Young
IPO 12-Apr-01 Book Runner(s) Kim Eng
IPO 12-Apr-01 Co-Manager(s) Lippo Securities Tbk PT
IPO 12-Apr-01 Co-Manager(s) Ting Kong-Rex Capital
IPO 12-Apr-01 Lead Manager(s) Taiwan Securities
IPO 12-Apr-01 Legal Adviser to the Issuer(s) Conyers
IPO 12-Apr-01 Legal Adviser to the Issuer(s) Fairbairn Catley Low & Kong
IPO 12-Apr-01 Legal Adviser to the Issuer(s) Guangzhou Foreign Economic Law
IPO 12-Apr-01 Legal Adviser(s) to the Manager(s) Brown & Wood

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