Integrity Focus

A former listed company chairman and two others, charged by the ICAC, were today (December 5) sentenced to jail terms ranging from four years and nine months to seven years and nine months at the High Court after a jury convicted them at a second retrial. It was revealed in a corruption investigation that the trio had conspired together to deceive the Stock Exchange of Hong Kong (SEHK) and the listed company by concealing their interests in an acquisition of dairy farms in New Zealand at NZ$500 million and falsely representing the gross profit of the dairy farms.

Chen Keen, 56, former executive director and joint-chairman of now de-listed Natural Dairy (NZ) Holdings Limited (NDNZ) and Hao May, formerly known as Wang May-yan, 61, owner and operator of UBNZ Trustee Limited (UBTL), were respectively jailed for seven years and three months and seven years and nine months. They were both disqualified from being company directors for six years and nine months. Yee Wenjye, 52, former vice-president of NDNZ, received a jail term of four years and nine months.

In sentencing, Madam Justice Anna Lai Yuen-kee said Chen and Hao were masterminds and instigators of the scam, which had a grave impact on the general public and the stock market. Yee played a lesser role but he was willing to participate in the scam.

Chen and Hao were earlier found guilty by a jury of four counts of conspiracy to defraud, while Yee was convicted of two counts of conspiracy to defraud.

The three defendants were respectively charged by the ICAC in late 2011 and early 2012. In June 2016, they were sentenced to jail terms ranging from five years to eight years and three months after being convicted by a jury at the Court of First Instance of the High Court. Following the trio’s appeal, the court quashed their convictions and ordered a retrial. After the jury at the retrial was discharged in June 2021, a second retrial was set for July this year.

An ICAC spokesperson notes that the ICAC does not tolerate corruption or any related offences. The Commission remains committed to tracking down the corrupt relentlessly so as to sustain Hong Kong’s status as a clean international financial centre.

Before it was renamed in October 2009, NDNZ was formerly known as China Jin Hui Mining Corporation Limited (CJHM). At the material time, the company was listed on the Main Board of the SEHK and engaged in the trading of iron ore. Its listing was cancelled in November 2022.

Chen joined CJHM as executive director and joint chairman in May 2009 while Yee later became its vice-president. Apart from being the owner and operator of UBTL, Hao also owned beneficial interests in its subsidiaries – UBNZ Assets Holdings Limited (UBAH) and UBNZ Funds Management Limited (UBFM).

The court heard that between May and September 2009, Chen and Hao conspired together to defraud the SEHK. They falsely represented that UBTL, UBFM and their respective ultimate beneficial owners were independent third parties to CJHM. They also made a false representation that there was no existing or prior understanding between Chen and Hao with respect to the acquisition of the entire issued share capital and assets of UBAH, including UBAH’s completing the purchase of dairy farms owned by the CraFarms Group in New Zealand, by CJHM from UBTL.

Meanwhile, Chen and Hao concealed that Chen had an interest in the acquisition. However, ICAC enquiries revealed that Chen and Hao were parties to an agreement signed with another company to share the commission arising from the sale and purchase of dairy farms owned by the CraFarms Group.

The three defendants also falsely represented that the gross profit of the properties and fixed assets relating to dairy farms owned by the CraFarms Group for the 2008/2009 financial year was over HK$92 million.

As a result, the SEHK was caused to allow CJHM to publish an announcement and a circular in relation to the acquisition which contained the false representations, the court heard.

Between May 2009 and July 2010, the three defendants conspired together to deploy similar fraudulent means to deceive CJHM and its existing shareholders into approving the agreement for the acquisition, and to cause CJHM to issue and release convertible notes and an optional bond for the payment of the acquisition.

The prosecution was today represented by prosecuting counsel Neil Mitchell, Senior Public Prosecutor Joycelyn Ng and barrister Martin Li, assisted by ICAC officers Fiona Wan, Gary Li, Jeffrey Chan and Stanley Cheung.