May Wang Found Guilty Of Fraud Over Failed Crafar Farms Acquisition

May Wang Found Guilty Of Fraud Over Failed Crafar Farms Acquisition

The failed bidders of Crafar farms have been found guilty of fraud in Hong Kong.
Hao May, formerly known as May Wang, 53, and two former senior executives of a listed company behind the bid, were found guilty of fraud over the acquisition of the 22 North Island dairy farms.

About 16 of the farms were eventually bought in 2012 by China’s Shanghai Pengxin for a reported $200 million.

On Friday a jury at Hong Kong’s Independent Commission Against Corruption (ICAC) convicted the trio of conspiracy to defraud over the planned purchase and laundering more than over HK$85 million.

An ICAC statement said Wang, 53, Keen Chen, 48, and Wenjye Yee, 44, would be sentenced in May and it appreciated the assistance provided by the New Zealand Serious Fraud Office in the case.

The trio are not facing charges in New Zealand.

They were found guilty of two counts of conspiracy to defraud, while Chen alone was convicted of one count of dealing with property known or reasonably believed to represent proceeds of an indictable offence.

The court heard China Jin Hui Mining Corporation Limited (CJHM) was listed on the Main Board of the Stock Exchange of Hong Kong (SEHK) and engaged in the trading of iron ore. CJHM was renamed to Natural Dairy (NZ )(AND NZ on October 14, 2009.

Chen joined CJHM as executive director and joint chairman on May 7, 2009, while Yee was its vice-president.  Apart from being the owner and operator of UBNZ Trustee Limited (UBTL) Wang also owned beneficial interests in its affiliated companies – UBNZ Assets Holdings Limited (UBAH) and UBNZ Funds Management Limited (UBFM).

Between May 7 and September 8, 2009, Chen, Hao and Yee conspired together to defraud the SEHK.

They concealed that Chen had an interest in the acquisition, in that Chen and Hao were parties to an agreement signed between them and Latitude Asia Limited to share the commission arising from the sale and purchase of dairy farms owned by the Crafar Farms Group in New Zealand.

The court was told they also falsely represented that the gross profit of the properties and fixed assets relating to dairy farms owned by the Crafar Farms Group for the year ended May 31, 2009 was approximately HK$92.52m; and concealed or failed to disclose their true financial position.

As a result, SEHK was caused to allow CJHM to publish an announcement and a circular in relation to the acquisition which contained the false representations.

The court heard that between May 7, 2009 and July 19, 2010, Chen, Hao and Yee conspired together to defraud CJHM and its existing shareholders by using similar fraudulent means.

They caused CJHM and its existing shareholders to approve the agreement for the acquisition, and caused CJHM to issue and release convertible notes and an optional bond for the payment of the acquisition.

By: Collette Devlin

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