SGOC: Multiple Arrests, Financial Fraud And Money Laundering

In December 2020, three of SGOC’s key people and largest shareholders were arrested by the Hong Kong Police and were named as the “masterminds” in a HK$475 million (approximately US$61 million) international fund fraud scheme involving SGOC.(1) They have been charged by the HK Police with conspiracy to defraud and money laundering, along with 21 other suspects.(2)

According to the HK Police, reporters at Hong Kong Commercial Daily and the China Business Network, SGOC was being used as a conduit to drain the assets from the HKIF Fund, which is reportedly controlled by two of SGOC’s largest shareholders (arrested).(3) What appeared at first to be constant M&A activity disclosed in SGOC’s SEC filings turned out to be a method for draining the assets of the HKIF Fund sold under AXA Insurance’s name to give it credibility.

According to the Sing Pao Daily News, 11 insurance agents from AXA were also arrested for accepting bribes from these now arrested SGOC main shareholders for including the fraudulent HKIF Fund in AXA’s offering. According to the HK Police, the premiums these investors paid actually went directly into the bank and securities accounts of the arrested “masterminds” (i.e., the SGOC main shareholders) and other “fraud group” members, or the accounts of entities controlled by these “masterminds” and “fraud group” members.(4)

Based on the statements made by the HK Police, as well as SGOC’s own statements in its SEC filings, these guys appear to have been defrauding both the investors in the HKIF Fund and the shareholders of SGOC at the same time.