Hong Kong regulator takes action against Chinese lottery firm
Hong Kong’s securities regulator has criticised China Ecotourism Group.
Hong Kong.- Hong Kong’s Securities and Futures Commission (SFC) has initiated disciplinary proceedings against China Ecotourism Group and several of its executives due to alleged financial irregularities and executive misconduct.
According to a statement released by the Stock Exchange of Hong Kong, the SFC criticised China Ecotourism Group for statements made to executives that purportedly harmed investors’ rights and interests. The company’s retention of three executives as directors raised concerns about potential investor detriment.
The SFC’s investigation revealed that between 2014 and 2018, China Ecotourism Group granted loans totalling HK$363m (US$46.4m) and RMB91m (US$11.6m) to nine borrowers. These were said to be to facilitate the development of the company’s lottery business in various Chinese provinces and in the Philippines, but all nine borrowers defaulted on their repayments, and the company lost contact with eight of them between 2017 and 2020.
The SFC found no evidence to support the claim that the loan proceeds were used for legitimate business purposes. It uncovered indications that the funds were transferred to accounts belonging to relatives of former executives, some of whom are now unreachable.
