Hong Kong court finds former bourse exec not guilty of graft

IPO consultant Richard Lum, who had been accused of paying bribes to Yeoh, was also found not guilty. Yeoh's role at Hong Kong Exchanges and Clearing (HKEX) was to make sure applications were compliant with listing rules and endorse recommendations to the bourse’s listing committees, which have the final say on a listing candidate's eligibility.

A Hong Kong court said on Friday that Eugene Yeoh, former co-head of IPO vetting at the financial hub's stock exchange operator, was not guilty of receiving bribes to look favorably on listing applications. IPO consultant Richard Lum, who had been accused of paying bribes to Yeoh, was also found not guilty.

Yeoh's role at Hong Kong Exchanges and Clearing (HKEX) was to make sure applications were compliant with listing rules and endorse recommendations to the bourse’s listing committees, which have the final say on a listing candidate's eligibility. The prosecution had argued Yeoh and Lum had collaborated on at least 12 IPOs between 2015 and 2019, most on Hong Kong's junior Growth Enterprise Market, or GEM board.

But judge Gary Lam said the prosecution had not proven Yeoh knew of Lum's role in the relevant IPOs. He also said the prosecution had not proven a total of HK$9.15 million ($1.17 million) Lum had transferred to bank accounts belonging to Yeoh's wife or the couple's joint account was a bribe and not for investment purposes, as the defense had argued since Yeoh's wife was an investment professional.

Yeoh left the bourse in May 2019. He was arrested by Hong Kong's anti-corruption watchdog, the Independent Commission Against Corruption, that same year. The decision is this year's second significant not guilty verdict by a Hong Kong court involving a defendant from the city's financial industry arrested by the ICAC.

In January this year, JPMorgan’s former vice chairman of Asia investment banking, Catherine Leung, was found not guilty of bribery, with the judge saying Leung had followed the bank’s existing procedures. “The ICAC respects the court ruling. We will study the reasons for verdict in consultation with the Department of Justice," a spokesperson for the watchdog said, adding it would continue to collaborate with relevant regulatory bodies to combat corruption and misconduct in the financial market.

An HKEX spokesperson said the exchange operator has cooperated fully with the ICAC in its investigation. "HKEX promotes the highest standards of integrity and professionalism across its various business functions, and is committed to continuing to play its role in maintaining the integrity of Hong Kong as a leading financial center."

Yeoh and Lum left the court without making any comment. ($1 = 7.7906 Hong Kong dollars)

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