Mainland-funded company director and businessman jailed for $14m L/C fraud
2002-7-31
A Mainland-funded company’s director and a businessman were respectively jailed for two years and one year at the District Court today (Wednesday) for conspiring to defraud two banks out of $14 million in Letters of Credit (L/C) loans.
Cheng Man-to, 46, director and shareholder of Oriental Hero Industries Limited (OHIL), and Chan Chin, 52, sole proprietor of Post Metal Works (PMW), were today found guilty on one count of conspiracy to defraud after trial.
OHIL is among a group of companies owned and operated by the municipal government of Shek Kit Town of Dongguan City, Guangdong Province. Its main business is in the trading of metallic raw materials, including steel sheets.
In sentencing, Judge Wong said immediate custodial sentences were imposed on the defendants to serve as a deterrent, since the offences involved were a serious breach of trust and an abuse of Hong Kong’s banking system.
The court heard that Cheng and Chan had conspired with other persons to defraud the Nanyang Commercial Bank and the National Commercial Bank over eight applications of L/C facilities between April 1, 1997 and October 31, 1998.
The court also heard that the duo had submitted false documents to the banks purportedly evidencing genuine underlying commercial transactions between OHIL and PMW, causing the banks to release about $14 million to PMW under the L/Cs.
The L/C proceeds were subsequently reverted by PMW to OHIL.
The bogus transactions concerned the sale and purchase of about 3,000 metric tons of steel sheets.
The ICAC had also obtained assistance from the Guangdong Provincial People's Procuratorate (GDPP) in relation to this case.
The case originated from a corruption complaint, alleging that the defendants might have bribed bank officers to obtain L/Cs through dishonest means.
Subsequent ICAC enquiries did not reveal any involvement of bank staff.
The prosecution was today represented by Senior Government Counsel Alex Lee, assisted by ICAC officer Kenny Tse.
Cheng Man-to, 46, director and shareholder of Oriental Hero Industries Limited (OHIL), and Chan Chin, 52, sole proprietor of Post Metal Works (PMW), were today found guilty on one count of conspiracy to defraud after trial.
OHIL is among a group of companies owned and operated by the municipal government of Shek Kit Town of Dongguan City, Guangdong Province. Its main business is in the trading of metallic raw materials, including steel sheets.
In sentencing, Judge Wong said immediate custodial sentences were imposed on the defendants to serve as a deterrent, since the offences involved were a serious breach of trust and an abuse of Hong Kong’s banking system.
The court heard that Cheng and Chan had conspired with other persons to defraud the Nanyang Commercial Bank and the National Commercial Bank over eight applications of L/C facilities between April 1, 1997 and October 31, 1998.
The court also heard that the duo had submitted false documents to the banks purportedly evidencing genuine underlying commercial transactions between OHIL and PMW, causing the banks to release about $14 million to PMW under the L/Cs.
The L/C proceeds were subsequently reverted by PMW to OHIL.
The bogus transactions concerned the sale and purchase of about 3,000 metric tons of steel sheets.
The ICAC had also obtained assistance from the Guangdong Provincial People's Procuratorate (GDPP) in relation to this case.
The case originated from a corruption complaint, alleging that the defendants might have bribed bank officers to obtain L/Cs through dishonest means.
Subsequent ICAC enquiries did not reveal any involvement of bank staff.
The prosecution was today represented by Senior Government Counsel Alex Lee, assisted by ICAC officer Kenny Tse.