Recent ICAC Cases

30
Dec 2020
Trio guilty of deceiving German electronics importer of HK$610,000

Three former senior executives of a subsidiary of a German electronic products importer, charged by the ICAC, were today (December 30) convicted at the District Court of deceiving the importer of HK$610,000 in relation to the procurement and testing of television (TV) sets and other expenses.

Tommy Chu king-sau, 51, former managing director of Wellon Far East Limited (Wellon); and Cylem Siu King-lam, 57, former assistant general manager of Wellon, were found guilty of three charges – two of conspiracy to defraud, contrary to Common Law, and one of conspiracy to falsify accounts, contrary to Section 19(1)(a) of the Theft Ordinance and Section 159A of the Crimes Ordinance.

Chu and Kwong Kwok-on, 42, former assistant merchandising manager of Wellon, were also found guilty of one count of conspiracy to falsify accounts. Chu was further convicted of another similar offence.

Judge Mr Johnny Chan Jong-heng adjourned the case to January 20 next year for mitigation and sentence. Chu and Siu were remanded in the custody of the Correctional Services Department while Kwong was allowed bail.

The case arose from a corruption complaint. Subsequent ICAC enquiries revealed the above offences, which took place between June 2009 and October 2013.

The court heard that at the material time, Wellon was a subsidiary and the Far East Asian buying office of Schmid Electronics GmbH (SEG), a German importer of electronic products. Chu, Siu and Kwong were Wellon’s managing director, assistant general manager and assistant merchandising manager respectively.

In general, SEG would place orders with Wellon and rely on Chu’s recommendations to source appropriate Mainland manufacturers for manufacturing video and audio products. Wellon would then place orders with manufacturers, arrange product testing, make payments to manufacturers and arrange shipment of the products to SEG’s clients in Europe.

The court heard that between March and May 2012, SEG received four orders from its customers and tasked Wellon to source for Mainland manufacturers to produce various TV sets and spare parts.

Chu and Siu then conspired with a then account manager of Wellon to falsely represent to SEG that a Mainland manufacturer known to SEG was sourced for the production and induced SEG to make a total payment of about US$1.2 million (about HK$9.3 million) to Wellon. In fact, another Mainland manufacturer was secretly engaged to take up the production at a lower price and inflated the aforesaid total payment by about US$34,000 (over HK$260,000).

For the purpose of book-keeping in Wellon’s accounting records, Chu and Siu conspired with the aforesaid account manager to falsify purchase orders issued by Wellon purportedly showing that the TV sets and spare parts were supplied by Shiny Tech Development Limited (Shiny Tech) which was owned by Siu.

The court also heard that upon SEG’s instruction, Wellon had all along engaged a particular laboratory to conduct electromagnetic compatibility tests on products before shipping them to Europe. After Speedy Well Technology Limited (Speedy Well) was set up by Siu in February 2010, Chu and Siu conspired with the Wellon account manager to falsely represent to SEG that Speedy Well would provide test reports in the name of that laboratory at a cheaper rate.

As a result, SEG was induced to pay for 43 test reports purportedly issued by Speedy Well at totalling HK$504,000. The tests were in fact conducted by another laboratory and the total payment was inflated by about HK$246,000.

Siu had never disclosed his interest in Shiny Tech and Speedy Well with Wellon, the court heard.

In addition, Chu and Kwong had conspired together and with the Wellon account manager and Chu’s then wife to falsify a number of payment vouchers and salary receipts which caused Wellon to pay the wife HK$42,000 for purportedly working as a part-time receptionist of Wellon.

Chu had also conspired with the Wellon account manager to falsify 10 payment vouchers, which purported to be entertainment expenses totalling over HK$66,000 incurred by them for the business purpose of Wellon. In fact, the expenses concerned were incurred by their personal consumptions.

SEG had rendered full assistance to the ICAC during its investigation.

The prosecution was today represented by prosecuting counsel Thomas Iu, assisted by ICAC Officer Gavin Lau.

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