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Wednesday, October 12, 2016, 22:15

HK financial fraud to stay flat

By Luo Weiteng

Fraud cases among Hong Kong-listed companies are expected to remain steady next year and hover at around 40 cases, according to a recent survey.

In its annual Fraud Survey released on Wednesday, global accounting firm Grant Thornton said the figure was consistent with the number of cases in the past three years,

It also found the construction and chemical sectors were the most susceptible for financial fraud. The two sectors contain complex business models with high-value projects, making it easier to conceal fraudulent business activities, said Barry Tong, a Hong Kong-based advisory of Grant Thornton.

He said the first two years after an initial public offering were usually the most dangerous period for companies’ trading being suspended. However, 59 percent of the 40 examined fraud cases point to companies who went public more than five years ago, up from 19 percent in 2015.

In the past three years, more than 50 percent of fraud cases went to mid-cap companies with market capitalization of more than HK$3 million.

sophia@chinadailyhk.com

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