Recent ICAC Cases


03
Apr 2020
Ex-financial controller of listed company jailed for $2.6m bribery and fraudA former financial controller of a listed company, charged by the ICAC, was today (April 3) sentenced to three years and seven months’ imprisonment at the District Court for conspiracy to accept an illegal rebate of about $590,000 for engaging an accounting firm to provide services, and defrauding the listed company of over $2 million by outsourcing other services to a consultant firm owned by him.Lau Ka-chung, 44, former financial controller cum company secretary of Southeast Asia Properties & Finance Limited (Southeast Asia Properties), was earlier found guilty of two charges – one of conspiracy for an agent to accept advantages, contrary to Section 9(1)(a) of the Prevention of Bribery Ordinance and Section 159A of the Crimes Ordinance, and one of fraud, contrary to Section 16A of the Theft Ordinance.In sentencing, Judge Katherine Lo Kit-yee said the case involved a serious conflict of interest and breach of trust.The judge also remarked that the case had damaged the governance of the listed company involved, and tarnished Hong Kong’s reputation as a financial centre.In addition, the judge ordered the defendant to pay about $590,000, being the amount of the bribe he accepted, as restitution to Southeast Asia Properties.The court heard that at the material time, the defendant was the financial controller cum company secretary of Southeast Asia Properties. He was the head of its accounts department, which handled all accounting and financial matters of Southeast Asia Properties and its subsidiaries.In May 2015, Southeast Asia Properties resolved to acquire a company at a consideration of over $336 million. The defendant suggested outsourcing the preparation work to an independent third party. The proposal was agreed by Southeast Asia Properties.The defendant then outsourced the internal control review, taxation, financial advisory and consultancy services in relation to the acquisition to an accounting firm.Between May 2015 and June 2016, Southeast Asia Properties and its subsidiaries released payments totalling $754,000 to the accounting firm for its services. Out of the $754,000, a total of about $590,000 was eventually transferred to the defendant’s bank account while the remaining sum was retained by the accounting firm.The court also heard that on June 19, 2015, the defendant set up Wishful Bright Enterprise Consultancy Limited (Wishful Bright), of which he was its sole director cum shareholder.Without disclosing his interest in Wishful Bright and obtaining quotations from other contractors, the defendant caused Southeast Asia Properties and its subsidiaries to engage Wishful Bright to provide various accounting, taxation, research, financial advisory and consultancy services between June 2015 and October 2016.As the head of Southeast Asia Properties’ accounts department, the defendant endorsed and approved the payments of 15 invoices issued by Wishful Bright. As a result, a total of over $2 million was released to Wishful Bright.Had Southeast Asia Properties known that the defendant was the director of Wishful Bright or held any interest in it, Southeast Asia Properties would not have engaged Wishful Bright to provide those services and settled the payments.Southeast Asia Properties had rendered full assistance to the ICAC during its investigation into the case.The prosecution was today represented by prosecuting counsel Dr Alain Sham, assisted by ICAC officers Oyan Cheung and Janice Chan.
02
Apr 2020
Company director gets six months’ jail for using false sales contract to open bank accountA company director, charged by the ICAC, was sentenced to six months’ imprisonment at the Kowloon City Magistracy today (April 2) after admitting that she had used a false sales contract to support her application for opening a corporate account for the company with a bank.Ma Tinghua, 47, sole director of Pro-way Do International Limited (PDIL), pleaded guilty to one count of conspiracy to use a false instrument, contrary to Sections 73 and 159A of the Crimes Ordinance.In sentencing, Magistrate Mr David Chum Yau-fong said the offence committed by the defendant was serious in nature.The magistrate said the defendant’s acts could have assisted others to commit crimes of higher severity such as money laundering, and caused economic loss to the bank concerned.The magistrate took a starting point of nine months’ imprisonment. Having considered the defendant’s guilty plea, her jail term was reduced by one-third. The case arose from a corruption complaint referred by DBS Bank (Hong Kong) Limited (DBS Hong Kong). Subsequent ICAC enquiries revealed the above offence.The court heard that the defendant is a mainland resident who had worked in a butcher shop in Guangzhou. In late 2018, an unidentified customer of the butcher shop invited her to assist in opening a corporate bank account in Hong Kong.Since January 8, 2019, the defendant was registered as the sole director of PDIL, which was incorporated in Hong Kong in September 2012.On January 24, 2019, the defendant went to a branch of DBS Hong Kong in Tsim Sha Tsui in the company of the customer. She signed on some documents given by the customer and submitted them to the bank to open a corporate bank account for PDIL.Among those documents was a false sales contract purportedly signed between PDIL and a home appliances manufacturer for selling three “10 feet dry cargo shipping containers” to the latter at over HK$68,000.The proprietor of the home appliances manufacturer confirmed that he did not know PDIL and the defendant, and that his company had never had any business dealing with PDIL, the court heard.The bank account of PDIL, which was successfully opened in late February 2019, was subsequently closed by DBS Hong Kong in June 2019 due to potential risk of money laundering activities.When interviewed under caution by ICAC officers in January 2020, the defendant admitted that she agreed to open a bank account in Hong Kong on behalf of the customer who offered her RMB10,000.DBS Hong Kong had rendered full assistance to the ICAC during its investigation into the case.The prosecution was today represented by ICAC officer Benjamin Ho.
01
Apr 2020
SME director admits $25m bank loans fraudA director of a Small and Medium Enterprise (SME), charged by the ICAC, admitted at the District Court today (April 1) her role in defrauding five banks of 33 loans totalling about $25 million and banking facilities totalling $22.5 million, as well as deceiving a government department and a public body into acting as guarantors for loans and trade facilities totalling $15.8 million granted by the banks.Irene Ng Sio-I, 44, director of Southern Flash Enterprises Limited (Southern Flash), pleaded guilty to 14 counts of conspiracy to defraud, contrary to Common Law. Two similar charges against Ng were left on file at the District Court.Judge Mr Tam Sze-lok adjourned the case to April 17 for sentence. The defendant was remanded in the custody of the Correctional Services Department.The case arose from a corruption complaint. Subsequent ICAC enquiries revealed the above offences, which took place between February 2010 and February 2013.The court heard that Southern Flash, an SME purportedly trading audio equipment, was set up by Wong Yim-wah in September 2008. Upon Wong’s invitation in 2009, Ng became the sole director cum shareholder of Southern Flash which was in fact essentially run by Wong and controlled by a de facto owner.To finance business development of local SMEs, various banks, including DBS Bank (Hong Kong) Limited (DBSHK), Hongkong and Shanghai Banking Corporation Limited (HSBC), Industrial and Commercial Bank of China Limited (ICBC) (now known as Industrial and Commercial Bank of China (Asia) Limited), Dah Sing Bank Limited (Dah Sing Bank) and Wing Hang Bank Limited (Wing Hang) (now known as OCBC Wing Hang Bank Limited), offered different types of credit facilities and loans to SMEs.Between 2008 and 2011, the Trade and Industry Department (TID) and the Hong Kong Mortgage Corporation Limited (HKMC) respectively launched various schemes, namely SME Loan Guarantee Scheme (SGS), Special Loan Guarantee Scheme (SpGS) and SME Financing Guarantee Scheme (SFGS), to assist SMEs to obtain credit facilities from banks by providing guarantees up to 80% of loans granted to them.The court heard that Ng conspired with Wong, and the abovementioned de facto owner and a clerk of Southern Flash (the duo) to defraud DBSHK, HSBC, ICBC and Dah Sing Bank, by dishonestly falsely representing that supporting documents submitted by Southern Flash in relation to its applications of banking facilities were genuine, causing the four banks to grant banking facilities totalling $22.5 million to Southern Flash.Ng had also conspired with Wong and the duo to defraud the TID by dishonestly falsely representing that all the information contained in four application forms for Special Loan Guarantee under the SpGS and an application form for Working Capital Loan Guarantee under the SGS was true, accurate and complete.As a result, the TID was caused to issue five guarantees in favour of DBSHK, HSBC and Dah Sing Bank; and to act as the guarantor for instalment loans, trade finance related facilities, overdraft facilities and term loans totalling $6.2 million granted by the three banks to Southern Flash.In addition, Ng conspired with Wong and the duo to defraud the HKMC by dishonestly falsely representing that all the information contained in three application forms for the SFGS was true, accurate and complete.HKMC was thus caused to issue three guarantees in favour of ICBC and Dah Sing Bank; and to act as the guarantor for import trade facilities or term loans totalling $9.6 million granted by the two banks to Southern Flash.Ng also conspired with Wong, the duo, six operators of seven purported suppliers of Southern Flash and other persons unknown to defraud Dah Sing Bank and Wing Hang by dishonestly submitting supporting documents purportedly in relation to transactions with Southern Flash.Dah Sing Bank and Wing Hang were caused to grant 33 loans totalling about $25 million to Southern Flash and to release the sums directly to the seven suppliers concerned, the court heard.Co-defendant Wong Yim-wah, 67, was jointly charged with Ng with 16 counts of conspiracy to defraud. A warrant of arrest against Wong was issued by the District Court after he failed to attend court on November 14, 2019.The TID, the HKMC and the five banks concerned had rendered full assistance to the ICAC during its investigation into the case.The prosecution was today represented by Senior Public Prosecutor Winnie Mok and assisted by ICAC officers Angel Lui and Sunny Chan.
25
Mar 2020
Ex-HKEX senior executive and consultant charged with bribery and MIPO over IPO applicationsA former Joint-head of the IPO Vetting Team of the Hong Kong Exchanges & Clearing Limited (HKEX) and an Initial Public Offering (IPO) consultant have been charged by the ICAC this (March 25) morning for alleged bribery and misconduct in public office (MIPO) involving a total of $9.15 million in connection with the IPO applications of various listed companies.Eugene Yeoh Kim-loong, 43, former Joint-head of the IPO Vetting Team of the Listing Department of the HKEX, faces two charges – one of public servant accepting an advantage, contrary to Section 4(2)(a) of the Prevention of Bribery Ordinance (POBO); and one of MIPO, contrary to Common Law.Richard Lum Chor-wah, 60, IPO consultant, faces one count of offering an advantage to a public servant, contrary to Section 4(1)(a) of the POBO.The defendants will be brought to the West Kowloon Magistracy this morning for mention.At the material time, Yeoh was one of the two Joint-heads overseeing the IPO Vetting Team of the Listing Department of the HKEX. He was responsible for vetting IPO applications for compliance with the Listing Rules and the Companies Ordinance, and endorsing recommendations of approval or rejection before those IPO applications were tabled to the Listing Committee or GEM Listing Approval Group.Lum was an IPO consultant providing advice and assistance to companies who intended to make IPO applications.The MIPO charge alleges that between June 20, 2017 and April 30, 2019, Yeoh, being a public official, namely Joint-head of the IPO Vetting Team of the Listing Department of the HKEX, wilfully misconducted himself in the course of or in relation to his public office, without reasonable excuse or justification.Yeoh has allegedly concealed from or failed to declare or disclose to the HKEX the transfer of a total sum of $9.15 million from Lum to Yeoh’s wife.Yeoh has also allegedly failed to declare a conflict of interest in connection with his handling and processing of various IPO applications in which Lum participated; and failed to abstain from the deliberation and decision making in respect of those IPO applications.One of the bribery charges alleges that on or about December 21, 2017, Yeoh accepted from Lum a sum of $2 million, without lawful authority or reasonable excuse, as an inducement to or reward for being or remaining favourably disposed to the IPO application of Shen You Holdings Limited.The other bribery charge alleges that on or about December 21, 2017, Lum offered the abovementioned $2 million to Yeoh for the same purpose without lawful authority or reasonable excuse.The case arose from a corruption complaint referred by the Securities and Futures Commission (SFC). The SFC and the HKEX have rendered assistance to the ICAC during its investigation into the case.
23
Jan 2020
Two former HyD subcontractor staff admit submitting false road inspection reportsTwo former assistant road inspectors of a subcontractor of the Highways Department (HyD), charged by the ICAC, today (January 23) admitted to separate charges of conspiracy to defraud the HyD by submitting road inspection reports containing photographs with falsely altered dates. Lam Hung-fai, 30, and Lee Yin-hong, 32, both former assistant road inspectors of Wah Fung Engineering Company Limited (Wah Fung), each pleaded guilty to one count of conspiracy to defraud, contrary to Common Law. Principal Magistrate Ms Bina Chainrai adjourned the case to March 5 for mention. Lam and Lee were granted bail. The case arose from a corruption complaint. Subsequent ICAC enquiries revealed the above offences. The court heard that in 2017, the HyD awarded a term contract to Chiu Hing Construction and Transportation Company Limited (Chiu Hing), which then subcontracted related works to Wah Fung. Under the contract, Chiu Hing was required to deploy road inspectors to conduct regular road inspections in Hong Kong Island and prepare reports supported by real-time photographs of the roads taken during the inspections. At the material time, Lam and Lee were employed by Wah Fung as assistant road inspectors to carry out inspections and prepare reports for roads in Western District and Central District respectively. Lam was under the supervision of an assistant to network manager and a senior site agent of Wah Fung while Lee was supervised by the assistant to network manager of Wah Fung and a project manager of Chiu Hing. Due to insufficient manpower to complete the necessary road inspections, Lam and Lee respectively conspired with their supervisors between different periods from April to October 2017 to defraud the HyD by dishonestly submitting various road inspection reports containing photographs of roads in which the dates had been falsely altered. The court heard that Lam and Lee had modified the dates shown on the relevant photographs purporting that they were taken on the dates when the corresponding road inspections were performed. As a result, the HyD was induced to accept the actual conditions of the roads on the dates as specified on the photographs were as depicted in them. Four other former assistant road inspectors of Wah Fung, Kwan Siu-hang, Kwong Chun-ho, Lo Ting-fung and Lam Chi-shing, aged between 27 and 30, were also each charged with one count of conspiracy to defraud in the case. No plea was taken when they appeared at the Eastern Magistracy today. Their case was also adjourned to March 5 for mention. The HyD had rendered full assistance to the ICAC during its investigation into the case. The prosecution was today represented by ICAC officer Romeo Chu.

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