A director of a state-owned company's subsidiary in Hong Kong was today (Wednesday) charged by the ICAC for allegedly conspiring to defraud a number of banks of HK$45 million in Letters of Credit (L/Cs) facilities with bogus business transactions.

Zhang Kang-ping, 55, director of Ringo Trading Limited (Ringo Trading), will appear at Eastern Court at 9:30 am tomorrow (Thursday) on two charges of conspiracy to defraud.

Ringo Trading, a subsidiary of the state-owned China Poly Group Corporation (China Poly), had a shareholding of Ringo Fortune International Limited (Ringo Fortune) which traded in plastic and medicine at the time of the alleged offences.

The case arose from a corruption report alleging that a company director might have accepted bribes over a business transaction relating to a joint venture.

The corruption allegation was found to be unsubstantiated. However, ICAC investigation uncovered the L/C fraud.

Investigation revealed that Zhang had allegedly conspired with two other businessmen to submit to various banks fictitious documents to support bogus business transactions, in order to apply for L/C facilities.

As a result, the banks had issued over $45 million in total in credit facilities to a number of companies allegedly controlled by the two businessmen.

The charges accused Zhang of conspiring with Ma Gang-quan and Chu Song Michael to defraud Societe Generale, Dao Heng Bank, Liu Chong Hing Bank and Standard Chartered Bank by dishonestly :

- causing Ringo Fortune and Ringo Trading to utilize credit facilities, in the form of L/Cs, from the banks;

- submitting false documents to the banks, purportedly evidenced genuine commercial transactions between Ringo Fortune and Chang Xing Enterprises Limited (Chang Xing); Ringo Trading and KFI Technology (HK) Limited (KFI); Ringo Trading and Wealth Base Trading Limited (Wealth Base); and Ringo Fortune and KFI; and

- causing the banks to release a total of HK$42,370,165 and US$407,400 respectively to Chang Xing, KFI and Wealth Base.

The alleged offences took place between December 1996 and March 1997.

Both China Poly and Ringo Trading rendered full assistance to the ICAC during its investigation.

Zhang is currently on ICAC bail, pending his court appearance tomorrow.