Recent ICAC Cases

May 2024
Duty-free chain store’s ex-general manager charged by ICAC admits conspiracy to defraud over $12m inflated red wine purchase

A former general manager of a duty-free chain store, charged by the ICAC, today (May 16) admitted at the District Court that he had conspired with others to defraud the chain store by concealing his conflicting interest in companies set up by him to resell bottled red wine sourced from a French supplier to the chain store, making a huge profit by inflating the prices by $12 million.

Lau Shu-yin, 77, former general manager of Sky Connection Limited (Sky Connection), pleaded guilty to one count of conspiracy to defraud, contrary to Common Law.

Judge Mr Clement Lee Hing-nin adjourned the case to August 20 for sentence and granted the defendant bail. The Judge also approved the prosecution’s application for a confiscation order and adjourned the relevant hearing to June 17.

Sky Connection sold duty-free goods under the business name “Free Duty”. Before the offence took place, Sky Connection’s merchandising and buying department used to source bottled red wine from a winery in France directly for sale at “Free Duty” shops.

The court heard that between August 2004 and May 2011, Lau and other persons implicated in the case caused Sky Connection to change its practice and placed purchase orders with the French winery via Jetfair Development Limited (Jetfair) and Master Good Trading Limited (Master Good). During the period, 56 purchase orders involving payments totalling over $26 million were placed.

The ICAC investigation arose from a corruption complaint. Enquiries revealed that Jetfair and Master Good had sourced the bottled red wine concerned from the French winery at over $14 million and resold them to Sky Connection at inflated prices, causing Sky Connection to make extra payments of over $12 million.

ICAC enquiries also revealed that Master Good and Jetfair were funded by Lau and two others and that Lau and his daughter were the sole shareholder-cum-director of Master Good and Jetfair respectively. But Lau had never disclosed to Sky Connection his association with the two companies.

Lau admitted that he and the two funders shared the profits generated in the scam proportionally and he received about $2 million in total.

Sky Connection required its staff to declare any conflict of interest and prohibited them from engaging in any business which might have a conflict with the company.

Au Tsz-kei, former merchandising and buying director of Sky Connection, was earlier charged for his alleged role in the scam. He pleaded not guilty to one count of conspiracy to defraud and his trial was scheduled for July 22.

Sky Connection had rendered full assistance to the ICAC during its investigation into the case.

The prosecution was today represented by prosecuting counsel Flora Cheng, assisted by ICAC officer May Lam.

The ICAC reminds staff of business organisations to avoid conflict of interest and make declarations in strict adherence to internal guidelines. Concealing any conflict of interest in relation to one’s official duties to benefit himself or his associates may contravene the criminal law, such as the Prevention of Bribery Ordinance if offering or accepting of bribes is involved.

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