Recent ICAC Cases

21
Jan 2021
One more charged for alleged role in bribery facilitated $75m L/C scam

The ICAC today (January 21) charged a director of a construction company with conspiracy to defraud and money laundering in relation to a bribery facilitated $75.3 million letters of credit (L/Cs) scam, following the prosecution of four others involved in the same investigation.

The ICAC investigation arose from a corruption complaint. Subsequent enquiries revealed the alleged offences.

Lau Chung-hoi, 54, shareholder-cum-director of now defunct Top Famous Construction Engineering Limited (TFCL), faces three charges – one of conspiracy to defraud, contrary to Common Law, and two of dealing with property known or believed to represent proceeds of an indictable offence, contrary to Section 25(1) of the Organized and Serious Crimes Ordinance.

The defendant will appear at the Eastern Magistrates’ Courts next Monday (January 25) for the case to be transferred to the District Court for plea.

At the material time, the defendant was the shareholder-cum-director of TFCL, a construction company in Hong Kong. In September 2016, TFCL signed a memorandum of understanding with China Railway Construction (HK) Limited (CRCL), a wholly owned subsidiary of publicly listed China Railway Construction Corporation Limited (CRCC), to form joint ventures to take up certain construction projects.

In December 2016, TFCL further entered into three trade agreements with China Railway International Trading (HK) Limited (CRITL), a wholly owned subsidiary of CRCL, for CRITL to act as TFCL’s purchasing agent to procure construction materials from King Tai Construction Limited (KTCL) for three other projects, with payments to be settled by L/Cs.

The conspiracy to defraud charge alleges that between June 1, 2016 and March 16, 2017, the defendant conspired with Wang Xiaoshan, deputy general manager of CRCL, Lau Hing-lung, director of KTCL and chief administrative officer of TFCL, Lo Pui-yu, director of TFCL, and other persons to defraud DBS Bank Limited (DBS Bank) and cause it to make payment totalling over $75.3 million to KTCL.

The charge alleges that the defendant and the abovementioned persons dishonestly applied to DBS Bank for issuing three L/Cs in favour of KTCL, knowing that there was no genuine underlying transaction for those L/Cs; and produced false documentation, including invoices, packing lists and cargo receipts, to support the applications.

The remaining two charges allege that on two occasions between January 25 and 26, and May 22, 2017, the defendant dealt with two sums totalling $10.5 million, which were connected with the aforesaid conspiracy to defraud charge, in a bank account of TFCL and a personal joint bank account of the defendant, knowing or having reasonable grounds to believe that they in whole or in part directly or indirectly represented proceeds of an indictable offence.

Wang Xiaoshan, 51, Lau Hing-lung, 56, Lo Pui-yu, 70, and Chan Ka-ho, 34, son-in-law of Lo and director of Azure Industrial Limited, were earlier charged with a total of 16 counts of bribery, conspiracy to defraud and money laundering for their alleged roles in the scam. The trial is scheduled for July 5 this year.

CRCC, CRCL, CRITL and DBS Bank have rendered full assistance to the ICAC during its investigation.

The defendant has been released on ICAC bail, pending his court appearance next Monday.

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