The Securities and Futures Commission (SFC) has obtained 13-year disqualification orders against three former top executives of China Candy Holdings Limited for orchestrating accounting fraud that overstated the company’s cash and bank balances by tens of millions of yuan. The Court of First Instance in Hong Kong ruled on 6 August 2026 that Mr Xu Jinpei (former chairman and executive director), Ms Hong Yinzhi (former chief executive officer and compliance officer), and Mr Wang Zhihong (former chief financial controller) engaged in deliberate schemes to deceive investors and auditors.
- Overstatement amount (2016): RMB38.1 million (87% of reported balances)
- Overstatement amount (2016 annual): RMB43.48 million (97% of reported balances)
- Disqualification period: 13 years from corporate director and management roles
- Stock code: 8182 (listing cancelled 31 December 2019)
The court found that the executives created false cash holdings through fictitious deposits recorded shortly before reporting cut-off dates and reversed shortly after. The scheme involved falsifying bank slips, bank statements, and accounting vouchers to circumvent standard audit procedures.
Ms Hong was directly implicated in 85 of 116 non-recorded transactions and 30 of 57 non-existent transactions, while Mr Wang was responsible for recording the falsified vouchers. The executives supplied falsified financial information to the company’s auditors during both interim reviews and annual audits.
The disqualification orders prohibit the three executives from acting as directors, liquidators, receivers, or managers of any listed or unlisted corporation in Hong Kong without court permission. The SFC’s Executive Director of Enforcement stated that senior executives and finance professionals will be held accountable for falsifying records and distorting financial statements.
The court also ordered the executives to pay the SFC’s legal costs. This ruling concludes the SFC’s proceedings against former directors and senior executives of China Candy in the Court of First Instance, though earlier orders against other former executives were issued in 2023 and 2026.
