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Dec 2024Yuen Long small house ‘Ding Rights’ cases: Two applicants charged by ICAC with conspiracy to defraud Lands Department each jailed for one yearThe ICAC had earlier charged 11 people, namely the operator of a small house developer, a village representative and small house applicants, for conspiring together to deceive the Lands Department into granting various building licenses for a small house estate development project in Yuen Long by transferring the “Ding Rights” concerned. Two of the small house applicants each received a one-year jail term at the Tuen Mun Magistrates’ Courts today (December 13).Two small house applicants, Choi Wai-sang, 63, and Jimmy Tang Kiu-chin, 74, earlier each pleaded guilty to one count of conspiracy to defraud, contrary to the Common Law.In sentencing, Acting Principal Magistrate Mr Daniel Tang Siu-hung remarked that the offences involved in the present cases were serious in nature. By selling their “Ding Rights”, the defendants defrauded the government and exploited land use, warranting custodial sentences.Under the New Territories Small House Policy, every male indigenous inhabitant of the New Territories aged 18 or above may exercise his “Ding Right” once and apply to the Lands Department for building a small house within a recognised village of the New Territories for his own occupation. A “Ding Right” is not transferrable.The court heard that between February and June 2006, Choi and Tang respectively made an application to the Lands Department for building a small house in Shui Tsiu San Tsuen in Yuen Long for their own occupation. They claimed that they were the respective sole legal and registered owner of the lots of land concerned, had never entered into any agreements with others to transfer or otherwise deal with their lots of land or relevant interests, and had no intention to sell their “Ding Rights” to other individuals or developers. The Lands Department subsequently granted the building licenses to the duo.The ICAC investigation arose from a corruption complaint. Enquiries revealed that since November 1991, a number of individuals, including Choi and Tang, had applied for building small houses in Shui Tsiu San Tsuen. The small houses were subsequently sold to members of the public by a developer under the name of a private estate, and each small house was sold at market price ranging from $9 to $13 million. The small houses of Choi and Tang were respectively sold in 2015 and 2017. The developer concerned received over $1,000 million for the sale of 115 small houses in the private estate.ICAC enquiries also revealed that since the 1990s, an indigenous inhabitant representative and other middlemen started the development of the estate project in Shui Tsiu San Tsuen by purchasing “Ding Rights” from indigenous inhabitants of Yuen Long. Choi and Tang had conspired with the middlemen to sell their “Ding Rights” at $100,000 each, totalling $200,000.Later in about March 2005, a developer entered into an agreement with the indigenous inhabitant representative and appointed the latter as its trustee to jointly develop the small house project. The indigenous inhabitant representative and the middlemen then continued to purchase more “Ding Rights” from indigenous inhabitants and arranged for them to apply for building licences to build small houses in Shui Tsiu San Tsuen.The Lands Department offered full assistance to the ICAC during its investigation into the cases. The prosecution was today represented by ICAC officer Chris Lai.Two individuals implicated in the scam, namely Edward Wong Kwong-wing, 75, operator of Wing Smart Construction Limited, and Ching Chan-ming, 67, indigenous inhabitant representative of Shui Tsiu San Tsuen, were earlier jointly charged by the ICAC in another case with one count of conspiracy to defraud. Their case is set for trial at the District Court on February 10, 2025.The ICAC also charged seven other small house applicants, aged between 43 and 74, in separate cases. The defendants are Wong Kwun-sing, Chan Chi-ming, Chan Wing-kin, Leung Kam-yick, Lung Fok-ye, Yeung Kai-kwong and Lok Tin-lung. Their cases are adjourned to January 17 next year for plea. 12
Dec 2024Property buyer charged by ICAC gets 14 months’ jail for mortgage loan fraud, $700,000 income from letting confiscatedThe ICAC had earlier charged a property buyer for inducing a bank not to demand repayment of a mortgage loan of over $8 million granted with a loan-to-value (LTV) ratio of 80 per cent by concealing the property was leased out and making false representation that the owner-occupied requirement was met. A Deputy Judge today (December 12) imposed a 14 months’ jail term on the defendant at the District Court and ordered to confiscate the income from letting the property totalling $700,000.Wong Hin-ning, 49, insurance agent, earlier pleaded guilty to two counts of fraud, contrary to section 16A of the Theft Ordinance.In sentencing, Deputy Judge Bernard Chung remarked that the case was serious in nature. He took a starting point of 30 months’ imprisonment and reduced the jail term to 14 months having considered the defendant’s guilty plea and other mitigating factors.The Deputy Judge also approved the prosecution’s application for confiscation order, and ordered to confiscate from the defendant crime proceeds of $700,000, being the income from letting the property in the present case. The defendant is required to satisfy the confiscation order by December 16, failing which she will have to serve an additional term of imprisonment of 20 months.According to the guidelines issued by the Hong Kong Monetary Authority, banks are required to comply with the LTV ratio requirement on owner-occupied residential mortgage lending. At the material time, China CITIC Bank International Limited (CNCBI) provided a mortgage loan with an LTV ratio of up to 80 per cent for a self-used private residential property valued between $8 million and $10 million.The court heard that, in late February 2020, the defendant purchased a private residential property in Ho Man Tin at $9.98 million on behalf of her son who was abroad at that time. A few days later, she applied for a mortgage loan with an LTV of 80 per cent with CNCBI and declared that the property would be occupied by her and her son. The defendant signed a declaration in the mortgage loan application form, declaring that she was under an obligation to notify CNCBI immediately if the property was no longer occupied by her or her son. The bank approved the application and granted a mortgage loan of over $8 million, representing 80 per cent of the purchase price of the property, to the defendant in late June 2020.The ICAC enquiries, arising from a corruption complaint, revealed that between August 2020 and June 2022, the defendant leased out the property concerned to two tenants at a monthly rental of $19,000 and $20,500 respectively, but never informed CNCBI of the change in the occupancy status of the property. CNCBI sent a letter in December 2021 to request the defendant and her son to confirm whether the property would continue to be occupied by them. The duo gave an affirmative reply to CNCBI.Had CNCBI known the property was used for leasing, they would have demanded the defendant to repay part or all of the mortgage loan or impose other conditions on her, including an increase in the interest rate.CNCBI rendered full assistance to the ICAC during its investigation into the case.The prosecution was today represented by Senior Public Prosecutor Jason Lau and Public Prosecutor Matthew Hui, assisted by ICAC officers Keith Kwok and Simon Ip. 09
Dec 2024Then substantial shareholder and chairman of listed company charged by ICAC guilty of conspiracy to defraud over ‘backdoor listing’, businessman wantedA then substantial shareholder of a listed company and its then chairman, charged by the ICAC, were today (December 9) convicted after trial at the District Court of conspiring with a businessman to defraud The Stock Exchange of Hong Kong Limited (SEHK), the listed company and its board of directors and shareholders by concealing a secret “backdoor listing” agreement in a capital raising exercise. A warrant for the arrest of the businessman, who failed to attend the court hearing, was earlier issued by the court.Chim Pui-chung, 78, then substantial shareholder of Asia Resources Holdings Limited (Asia Resources); and Ricky Chim Kim-lun, 55, then chairman of Asia Resources, were found guilty of two counts of conspiracy to defraud, contrary to the Common Law.Ma Zhonghong, 51, the businessman implicated, was charged with the abovementioned two counts of conspiracy to defraud, and one of dealing with property known or reasonably believed to represent proceeds of an indictable offence (commonly known as money laundering), contrary to section 25(1) of the Organized and Serious Crimes Ordinance.Wong Poe-lai, 68, then employee of Ma, was found guilty of one count of money laundering.In the reasons for verdict handed down today, Judge Mr Ernest Lin Kam-hung deplored the co-conspirators in the present case for their involvement in underhand dealings. Through financial shenanigans, the co-conspirators had sold a listed company like their private property for personal gain.The judge adjourned the case to January 8 next year for mitigation and sentence, as well as the hearing of the prosecution’s application for a confiscation order. Chim Pui-chung, Ricky Chim and Wong were remanded in the custody of the Correctional Services Department.The present case stemmed from a corruption complaint referred to the ICAC by the Securities and Futures Commission (SFC). Upon completion of the ICAC investigation, four individuals taking part in the secret “backdoor listing” scheme were charged with conspiracy to defraud and money laundering.An ICAC spokesperson notes that the Commission will continue its close collaboration with financial regulators to combat corruption and related crimes involving listed companies, and continue to enhance corporate governance of listed company through corruption prevention and education. The ICAC will strive to uphold integrity and fair operation of the Hong Kong financial market and to foster the confidence of stakeholders in the financial system.At the material time, Asia Resources was listed on the Main Board of the SEHK. After Chim Pui-chung became a substantial shareholder of Asia Resources in mid-October 2008, his son, Ricky Chim, was appointed as an executive director of Asia Resources on the following day, and served as chairman of its board of directors between December 19, 2008 and December 11, 2014.The court heard that in July 2013, Chim Pui-chung and Ricky Chim negotiated with Ma in private a “backdoor listing” agreement selling the control of Asia Resources to Ma. On the basis that the entire 100 per cent shareholding of Asia Resources would cost $300 million, the trio made an agreement for Ma to pay Chim Pui-chung a sum of about $210 million to control 70 to 75 per cent of the entire issued share capital of Asia Resources (the “backdoor listing” agreement).In order to execute the “backdoor listing” agreement, Ricky Chim, as the chairman of Asia Resources, chaired two board meetings in late July and early August 2013. At the meetings, directors of Asia Resources resolved and approved to proceed with the placing of new shares and the issuance of convertible notes to raise funds of over $550 million (capital-raising exercise). Ricky Chim, who voted on both occasions, declared that he did not have any interest in the capital-raising exercise and he had never disclosed the “backdoor listing” agreement to Asia Resources. The placing of new shares in the capital-raising exercise was completed in late July 2013.In mid-August and mid-September 2013, Asia Resources respectively published an announcement and a circular in relation to the issuance of convertible notes in the capital-raising exercise, stating that no directors and shareholders had a material interest in the issuance of convertible notes, and no shareholders were required to abstain from voting in the special general meeting concerned. At the special general meeting held on October 3, 2013, Chim Pui-chung voted for the issuance of convertible notes. The resolution was eventually passed by shareholders.…/3ICAC enquiries revealed that Chim Pui-chung received a total sum of $169 million from Ma pursuant to the “backdoor listing” agreement about a month after Asia Resources approved of the capital-raising exercise.Chim Pui-chung and Ricky Chim had concealed from the SEHK the purpose of the capital-raising exercise, which was to increase the entire issued share capital of Asia Resources, thereby facilitating the execution of the “backdoor listing” agreement, causing the SEHK to approve the publication of the announcements and circulars in relation to the capital-raising exercise by Asia Resources, the court heard.Between October 2013 and January 2014, co-defendant Wong followed the instruction of her employer, Ma, to deal with proceeds of indictable offence, namely convertible notes issued by Asia Resources in the principal amount of $42 million.The SEHK and the SFC rendered full assistance to the ICAC during its investigation into the case.The prosecution was today represented by Senior Public Prosecutors Ivan Shiu and Derek Wong, assisted by ICAC officers Matthew Tong and Vivian Poon. 05
Dec 2024Then employee of insurer charged by ICAC for soliciting bribe from broker firm director over motor insurance of 600 new taxisA then employee of an insurance company was charged by the ICAC yesterday (December 4) for allegedly soliciting a bribe from a director of a broker firm for assisting a client to take out motor insurance policies for 600 new taxis, involving premiums totalling over $24 million. The solicitation was rejected.Wong Ka-wing, 39, then team head of Bank of China Group Insurance Company Limited (BOCGI), faces one count of agent soliciting an advantage, contrary to section 9(1)(a) of the Prevention of Bribery Ordinance. He was released on ICAC bail, pending his appearance at the Eastern Magistrates’ Courts tomorrow (December 6) for mention.At the material time, the defendant was the team head of the brokers and agency business marketing department of BOCGI, which was responsible for liaising with broker firms, including Pro Insurance & Financial Management Limited (Pro Insurance), for selling insurance products such as motor insurance.Pro Insurance would arrange its clients to take out motor insurance policies from BOCGI for new taxis, and receive 5 per cent of the yearly premium of each policy from BOCGI as commission.In mid-2022, a client of Pro Insurance planned to take out vehicle insurance policies for over 600 new taxis. During the negotiation with BOCGI, a director of Pro Insurance proposed to lower the annual premium per vehicle from $45,500 to $40,000, or to increase the commission payable to Pro Insurance to 7.5 per cent.It is alleged that between November 2022 and January 2023, the defendant solicited a bribe from the director of Pro Insurance for assisting Pro Insurance to secure BOCGI approval of the insurance policy agreement. The bribe solicited ranged from 1 to 3 per cent of the total yearly insurance premiums of the agreement.The director of Pro Insurance did not accede to the defendant’s solicitation. Should the defendant’s bribery scheme have materialised, the total yearly premiums for over 600 new taxis, each paying $40,000 per year, would amount to over $24 million. Meanwhile, the bribe concerned would amount to over $240,000.BOCGI rendered full assistance to the ICAC during its investigation into the case. 04
Dec 2024Ex-manager of electric motors company charged by ICAC gets 54 months’ jail at High Court for $70m purchase orders fraud over conflict of interestA former manager of an electric motors company, charged by the ICAC, was today (December 4) sentenced to 54 months’ imprisonment at the Court of First Instance of the High Court for deceiving the company into placing over 1,300 purchase orders of electronic parts worth totalling over $70 million with a supplier in six and a half years by concealing the interest of himself and his family member in the supplier.Seh Yat-wing, 60, former manager of Johnson Electric Group, earlier pleaded guilty to two counts of fraud, contrary to section 16A of the Theft Ordinance.In sentencing, Mr Justice Andrew Chan Hing-wai noted that the defendant had abused his position, breached the trust in him and made a profit of nearly $7.4 million out of the scheme secretly. Having taken various mitigating factors into account, a 54 months’ imprisonment was imposed on the defendant.The ICAC advises business organisations to establish clear guidelines and systems of declaration on conflict of interest. Staff members of business organisations are reminded to avoid conflict of interest situations and to make timely declaration to their employers. Concealing any conflict of interest in relation to one’s official duties to benefit himself or his associates may constitute a breach of the Prevention of Bribery Ordinance or other criminal law.The court heard that publicly listed Johnson Electric Holdings Limited and its subsidiaries (collectively referred to as Johnson Electric Group) engaged in the manufacturing and sale of motion systems. In accordance with the policy of Johnson Electric Group managing conflict of interest, its employees should not engage in any business of its suppliers or customers. In addition, its employees should disclose relationships that may present a possible conflict of interest.The defendant joined Johnson Electric Group in 2006 as assistant manager and was promoted to manager in 2015. He was responsible for selecting suitable suppliers for the group and procuring electric parts.The ICAC investigation arose from a corruption complaint. Enquiries revealed that in September 2010, the defendant approved the applications of Eaton Enterprise Limited (Eaton) for registering as supplier of Johnson Electric Group. Between September 2010 and March 2017, Johnson Electric Group placed over 1,300 orders of electric parts with Eaton and settled payments amounted to over $70 million.ICAC enquiries revealed that the defendant concealed from Johnson Electric Group his or his family member’s interests in Eaton. At the material time, the defendant and the registered sole director cum shareholder of Eaton gave birth to a girl, but the defendant had never declared to Johnson Electric Group their relationship and his interest in Eaton. Had Johnson Electric Group known the relationship between the defendant and Eaton, it would not have registered Eaton as its supplier and placed orders with it.Enquiries also revealed that the defendant received from Eaton around $7.4 million out of the payments settled by Johnson Electric Group totalling over $70 million.Johnson Electric Group rendered full assistance to the ICAC during its investigation into the case.The prosecution was today represented by Senior Public Prosecutor Audrey Parwani, assisted by ICAC officer Kenneth Chan.
Dec 2024Yuen Long small house ‘Ding Rights’ cases: Two applicants charged by ICAC with conspiracy to defraud Lands Department each jailed for one yearThe ICAC had earlier charged 11 people, namely the operator of a small house developer, a village representative and small house applicants, for conspiring together to deceive the Lands Department into granting various building licenses for a small house estate development project in Yuen Long by transferring the “Ding Rights” concerned. Two of the small house applicants each received a one-year jail term at the Tuen Mun Magistrates’ Courts today (December 13).Two small house applicants, Choi Wai-sang, 63, and Jimmy Tang Kiu-chin, 74, earlier each pleaded guilty to one count of conspiracy to defraud, contrary to the Common Law.In sentencing, Acting Principal Magistrate Mr Daniel Tang Siu-hung remarked that the offences involved in the present cases were serious in nature. By selling their “Ding Rights”, the defendants defrauded the government and exploited land use, warranting custodial sentences.Under the New Territories Small House Policy, every male indigenous inhabitant of the New Territories aged 18 or above may exercise his “Ding Right” once and apply to the Lands Department for building a small house within a recognised village of the New Territories for his own occupation. A “Ding Right” is not transferrable.The court heard that between February and June 2006, Choi and Tang respectively made an application to the Lands Department for building a small house in Shui Tsiu San Tsuen in Yuen Long for their own occupation. They claimed that they were the respective sole legal and registered owner of the lots of land concerned, had never entered into any agreements with others to transfer or otherwise deal with their lots of land or relevant interests, and had no intention to sell their “Ding Rights” to other individuals or developers. The Lands Department subsequently granted the building licenses to the duo.The ICAC investigation arose from a corruption complaint. Enquiries revealed that since November 1991, a number of individuals, including Choi and Tang, had applied for building small houses in Shui Tsiu San Tsuen. The small houses were subsequently sold to members of the public by a developer under the name of a private estate, and each small house was sold at market price ranging from $9 to $13 million. The small houses of Choi and Tang were respectively sold in 2015 and 2017. The developer concerned received over $1,000 million for the sale of 115 small houses in the private estate.ICAC enquiries also revealed that since the 1990s, an indigenous inhabitant representative and other middlemen started the development of the estate project in Shui Tsiu San Tsuen by purchasing “Ding Rights” from indigenous inhabitants of Yuen Long. Choi and Tang had conspired with the middlemen to sell their “Ding Rights” at $100,000 each, totalling $200,000.Later in about March 2005, a developer entered into an agreement with the indigenous inhabitant representative and appointed the latter as its trustee to jointly develop the small house project. The indigenous inhabitant representative and the middlemen then continued to purchase more “Ding Rights” from indigenous inhabitants and arranged for them to apply for building licences to build small houses in Shui Tsiu San Tsuen.The Lands Department offered full assistance to the ICAC during its investigation into the cases. The prosecution was today represented by ICAC officer Chris Lai.Two individuals implicated in the scam, namely Edward Wong Kwong-wing, 75, operator of Wing Smart Construction Limited, and Ching Chan-ming, 67, indigenous inhabitant representative of Shui Tsiu San Tsuen, were earlier jointly charged by the ICAC in another case with one count of conspiracy to defraud. Their case is set for trial at the District Court on February 10, 2025.The ICAC also charged seven other small house applicants, aged between 43 and 74, in separate cases. The defendants are Wong Kwun-sing, Chan Chi-ming, Chan Wing-kin, Leung Kam-yick, Lung Fok-ye, Yeung Kai-kwong and Lok Tin-lung. Their cases are adjourned to January 17 next year for plea. 12
Dec 2024Property buyer charged by ICAC gets 14 months’ jail for mortgage loan fraud, $700,000 income from letting confiscatedThe ICAC had earlier charged a property buyer for inducing a bank not to demand repayment of a mortgage loan of over $8 million granted with a loan-to-value (LTV) ratio of 80 per cent by concealing the property was leased out and making false representation that the owner-occupied requirement was met. A Deputy Judge today (December 12) imposed a 14 months’ jail term on the defendant at the District Court and ordered to confiscate the income from letting the property totalling $700,000.Wong Hin-ning, 49, insurance agent, earlier pleaded guilty to two counts of fraud, contrary to section 16A of the Theft Ordinance.In sentencing, Deputy Judge Bernard Chung remarked that the case was serious in nature. He took a starting point of 30 months’ imprisonment and reduced the jail term to 14 months having considered the defendant’s guilty plea and other mitigating factors.The Deputy Judge also approved the prosecution’s application for confiscation order, and ordered to confiscate from the defendant crime proceeds of $700,000, being the income from letting the property in the present case. The defendant is required to satisfy the confiscation order by December 16, failing which she will have to serve an additional term of imprisonment of 20 months.According to the guidelines issued by the Hong Kong Monetary Authority, banks are required to comply with the LTV ratio requirement on owner-occupied residential mortgage lending. At the material time, China CITIC Bank International Limited (CNCBI) provided a mortgage loan with an LTV ratio of up to 80 per cent for a self-used private residential property valued between $8 million and $10 million.The court heard that, in late February 2020, the defendant purchased a private residential property in Ho Man Tin at $9.98 million on behalf of her son who was abroad at that time. A few days later, she applied for a mortgage loan with an LTV of 80 per cent with CNCBI and declared that the property would be occupied by her and her son. The defendant signed a declaration in the mortgage loan application form, declaring that she was under an obligation to notify CNCBI immediately if the property was no longer occupied by her or her son. The bank approved the application and granted a mortgage loan of over $8 million, representing 80 per cent of the purchase price of the property, to the defendant in late June 2020.The ICAC enquiries, arising from a corruption complaint, revealed that between August 2020 and June 2022, the defendant leased out the property concerned to two tenants at a monthly rental of $19,000 and $20,500 respectively, but never informed CNCBI of the change in the occupancy status of the property. CNCBI sent a letter in December 2021 to request the defendant and her son to confirm whether the property would continue to be occupied by them. The duo gave an affirmative reply to CNCBI.Had CNCBI known the property was used for leasing, they would have demanded the defendant to repay part or all of the mortgage loan or impose other conditions on her, including an increase in the interest rate.CNCBI rendered full assistance to the ICAC during its investigation into the case.The prosecution was today represented by Senior Public Prosecutor Jason Lau and Public Prosecutor Matthew Hui, assisted by ICAC officers Keith Kwok and Simon Ip. 09
Dec 2024Then substantial shareholder and chairman of listed company charged by ICAC guilty of conspiracy to defraud over ‘backdoor listing’, businessman wantedA then substantial shareholder of a listed company and its then chairman, charged by the ICAC, were today (December 9) convicted after trial at the District Court of conspiring with a businessman to defraud The Stock Exchange of Hong Kong Limited (SEHK), the listed company and its board of directors and shareholders by concealing a secret “backdoor listing” agreement in a capital raising exercise. A warrant for the arrest of the businessman, who failed to attend the court hearing, was earlier issued by the court.Chim Pui-chung, 78, then substantial shareholder of Asia Resources Holdings Limited (Asia Resources); and Ricky Chim Kim-lun, 55, then chairman of Asia Resources, were found guilty of two counts of conspiracy to defraud, contrary to the Common Law.Ma Zhonghong, 51, the businessman implicated, was charged with the abovementioned two counts of conspiracy to defraud, and one of dealing with property known or reasonably believed to represent proceeds of an indictable offence (commonly known as money laundering), contrary to section 25(1) of the Organized and Serious Crimes Ordinance.Wong Poe-lai, 68, then employee of Ma, was found guilty of one count of money laundering.In the reasons for verdict handed down today, Judge Mr Ernest Lin Kam-hung deplored the co-conspirators in the present case for their involvement in underhand dealings. Through financial shenanigans, the co-conspirators had sold a listed company like their private property for personal gain.The judge adjourned the case to January 8 next year for mitigation and sentence, as well as the hearing of the prosecution’s application for a confiscation order. Chim Pui-chung, Ricky Chim and Wong were remanded in the custody of the Correctional Services Department.The present case stemmed from a corruption complaint referred to the ICAC by the Securities and Futures Commission (SFC). Upon completion of the ICAC investigation, four individuals taking part in the secret “backdoor listing” scheme were charged with conspiracy to defraud and money laundering.An ICAC spokesperson notes that the Commission will continue its close collaboration with financial regulators to combat corruption and related crimes involving listed companies, and continue to enhance corporate governance of listed company through corruption prevention and education. The ICAC will strive to uphold integrity and fair operation of the Hong Kong financial market and to foster the confidence of stakeholders in the financial system.At the material time, Asia Resources was listed on the Main Board of the SEHK. After Chim Pui-chung became a substantial shareholder of Asia Resources in mid-October 2008, his son, Ricky Chim, was appointed as an executive director of Asia Resources on the following day, and served as chairman of its board of directors between December 19, 2008 and December 11, 2014.The court heard that in July 2013, Chim Pui-chung and Ricky Chim negotiated with Ma in private a “backdoor listing” agreement selling the control of Asia Resources to Ma. On the basis that the entire 100 per cent shareholding of Asia Resources would cost $300 million, the trio made an agreement for Ma to pay Chim Pui-chung a sum of about $210 million to control 70 to 75 per cent of the entire issued share capital of Asia Resources (the “backdoor listing” agreement).In order to execute the “backdoor listing” agreement, Ricky Chim, as the chairman of Asia Resources, chaired two board meetings in late July and early August 2013. At the meetings, directors of Asia Resources resolved and approved to proceed with the placing of new shares and the issuance of convertible notes to raise funds of over $550 million (capital-raising exercise). Ricky Chim, who voted on both occasions, declared that he did not have any interest in the capital-raising exercise and he had never disclosed the “backdoor listing” agreement to Asia Resources. The placing of new shares in the capital-raising exercise was completed in late July 2013.In mid-August and mid-September 2013, Asia Resources respectively published an announcement and a circular in relation to the issuance of convertible notes in the capital-raising exercise, stating that no directors and shareholders had a material interest in the issuance of convertible notes, and no shareholders were required to abstain from voting in the special general meeting concerned. At the special general meeting held on October 3, 2013, Chim Pui-chung voted for the issuance of convertible notes. The resolution was eventually passed by shareholders.…/3ICAC enquiries revealed that Chim Pui-chung received a total sum of $169 million from Ma pursuant to the “backdoor listing” agreement about a month after Asia Resources approved of the capital-raising exercise.Chim Pui-chung and Ricky Chim had concealed from the SEHK the purpose of the capital-raising exercise, which was to increase the entire issued share capital of Asia Resources, thereby facilitating the execution of the “backdoor listing” agreement, causing the SEHK to approve the publication of the announcements and circulars in relation to the capital-raising exercise by Asia Resources, the court heard.Between October 2013 and January 2014, co-defendant Wong followed the instruction of her employer, Ma, to deal with proceeds of indictable offence, namely convertible notes issued by Asia Resources in the principal amount of $42 million.The SEHK and the SFC rendered full assistance to the ICAC during its investigation into the case.The prosecution was today represented by Senior Public Prosecutors Ivan Shiu and Derek Wong, assisted by ICAC officers Matthew Tong and Vivian Poon. 05
Dec 2024Then employee of insurer charged by ICAC for soliciting bribe from broker firm director over motor insurance of 600 new taxisA then employee of an insurance company was charged by the ICAC yesterday (December 4) for allegedly soliciting a bribe from a director of a broker firm for assisting a client to take out motor insurance policies for 600 new taxis, involving premiums totalling over $24 million. The solicitation was rejected.Wong Ka-wing, 39, then team head of Bank of China Group Insurance Company Limited (BOCGI), faces one count of agent soliciting an advantage, contrary to section 9(1)(a) of the Prevention of Bribery Ordinance. He was released on ICAC bail, pending his appearance at the Eastern Magistrates’ Courts tomorrow (December 6) for mention.At the material time, the defendant was the team head of the brokers and agency business marketing department of BOCGI, which was responsible for liaising with broker firms, including Pro Insurance & Financial Management Limited (Pro Insurance), for selling insurance products such as motor insurance.Pro Insurance would arrange its clients to take out motor insurance policies from BOCGI for new taxis, and receive 5 per cent of the yearly premium of each policy from BOCGI as commission.In mid-2022, a client of Pro Insurance planned to take out vehicle insurance policies for over 600 new taxis. During the negotiation with BOCGI, a director of Pro Insurance proposed to lower the annual premium per vehicle from $45,500 to $40,000, or to increase the commission payable to Pro Insurance to 7.5 per cent.It is alleged that between November 2022 and January 2023, the defendant solicited a bribe from the director of Pro Insurance for assisting Pro Insurance to secure BOCGI approval of the insurance policy agreement. The bribe solicited ranged from 1 to 3 per cent of the total yearly insurance premiums of the agreement.The director of Pro Insurance did not accede to the defendant’s solicitation. Should the defendant’s bribery scheme have materialised, the total yearly premiums for over 600 new taxis, each paying $40,000 per year, would amount to over $24 million. Meanwhile, the bribe concerned would amount to over $240,000.BOCGI rendered full assistance to the ICAC during its investigation into the case. 04
Dec 2024Ex-manager of electric motors company charged by ICAC gets 54 months’ jail at High Court for $70m purchase orders fraud over conflict of interestA former manager of an electric motors company, charged by the ICAC, was today (December 4) sentenced to 54 months’ imprisonment at the Court of First Instance of the High Court for deceiving the company into placing over 1,300 purchase orders of electronic parts worth totalling over $70 million with a supplier in six and a half years by concealing the interest of himself and his family member in the supplier.Seh Yat-wing, 60, former manager of Johnson Electric Group, earlier pleaded guilty to two counts of fraud, contrary to section 16A of the Theft Ordinance.In sentencing, Mr Justice Andrew Chan Hing-wai noted that the defendant had abused his position, breached the trust in him and made a profit of nearly $7.4 million out of the scheme secretly. Having taken various mitigating factors into account, a 54 months’ imprisonment was imposed on the defendant.The ICAC advises business organisations to establish clear guidelines and systems of declaration on conflict of interest. Staff members of business organisations are reminded to avoid conflict of interest situations and to make timely declaration to their employers. Concealing any conflict of interest in relation to one’s official duties to benefit himself or his associates may constitute a breach of the Prevention of Bribery Ordinance or other criminal law.The court heard that publicly listed Johnson Electric Holdings Limited and its subsidiaries (collectively referred to as Johnson Electric Group) engaged in the manufacturing and sale of motion systems. In accordance with the policy of Johnson Electric Group managing conflict of interest, its employees should not engage in any business of its suppliers or customers. In addition, its employees should disclose relationships that may present a possible conflict of interest.The defendant joined Johnson Electric Group in 2006 as assistant manager and was promoted to manager in 2015. He was responsible for selecting suitable suppliers for the group and procuring electric parts.The ICAC investigation arose from a corruption complaint. Enquiries revealed that in September 2010, the defendant approved the applications of Eaton Enterprise Limited (Eaton) for registering as supplier of Johnson Electric Group. Between September 2010 and March 2017, Johnson Electric Group placed over 1,300 orders of electric parts with Eaton and settled payments amounted to over $70 million.ICAC enquiries revealed that the defendant concealed from Johnson Electric Group his or his family member’s interests in Eaton. At the material time, the defendant and the registered sole director cum shareholder of Eaton gave birth to a girl, but the defendant had never declared to Johnson Electric Group their relationship and his interest in Eaton. Had Johnson Electric Group known the relationship between the defendant and Eaton, it would not have registered Eaton as its supplier and placed orders with it.Enquiries also revealed that the defendant received from Eaton around $7.4 million out of the payments settled by Johnson Electric Group totalling over $70 million.Johnson Electric Group rendered full assistance to the ICAC during its investigation into the case.The prosecution was today represented by Senior Public Prosecutor Audrey Parwani, assisted by ICAC officer Kenneth Chan.