Company director gets 18 months for $6m L/C fraud
2002-9-17
A company director, charged by the ICAC, was today (Tuesday) sentenced at District Court to 18 months’ imprisonment for defrauding a bank of $6 million in Letters of Credit (L/C) facilities based on bogus business transactions.
Chan Tung-yeung, 69, director of Ford Mart Limited (Ford Mart), yesterday pleaded guilty to one count of conspiracy to defraud the Kwangtung Provincial Bank. The court ordered the second charge of conspiracy to defraud against him be left on court file.
In sentencing, Judge Christie said an immediate jail term was warranted, since the offence committed by the defendant had upset the L/C system which was important to international trade for over a hundred years.
The judge added that as the L/C system depended entirely on trust, false documents would cause it to fall apart.
The court heard that between October 1997 and December 1998, Chan had conspired with other persons to defraud the Kwangtung Provincial Bank over three L/C applications.
They had submitted false documents to the bank, purportedly evidencing genuine underlying commercial transactions between Ford Mart and Uni-Art Precise Products Limited (Uni-Art), of which Guangzhou Municipal Government was a major shareholder.
As a result, the bank released about $6.4 million to Ford Mart under the L/Cs.
The court also heard that Ford Mart reverted the proceeds to Uni-Art after deducting 0.3 per cent as "handling fee". Uni-Art had subsequently repaid the loans to the bank.
Three other persons, who were also charged in the same case, had earlier absconded.
They were Lai Kam-yau, 72, director of Creative Worth Development Limited, Regent Delta Limited (Regent) and South China Electronics Company Limited (South China); Chan Cheng, 67, director of Regent and South China; and Law Ming, 59, director of South Chi na.
The trio were scheduled to appear in District Court in July this year on two joint charges of conspiracy to defraud, but failed to turn up. Warrants for their arrests were issued by the court.
The prosecution was today represented by Senior Government Counsel Sharman Lam, assisted by ICAC officer David Ng.
Chan Tung-yeung, 69, director of Ford Mart Limited (Ford Mart), yesterday pleaded guilty to one count of conspiracy to defraud the Kwangtung Provincial Bank. The court ordered the second charge of conspiracy to defraud against him be left on court file.
In sentencing, Judge Christie said an immediate jail term was warranted, since the offence committed by the defendant had upset the L/C system which was important to international trade for over a hundred years.
The judge added that as the L/C system depended entirely on trust, false documents would cause it to fall apart.
The court heard that between October 1997 and December 1998, Chan had conspired with other persons to defraud the Kwangtung Provincial Bank over three L/C applications.
They had submitted false documents to the bank, purportedly evidencing genuine underlying commercial transactions between Ford Mart and Uni-Art Precise Products Limited (Uni-Art), of which Guangzhou Municipal Government was a major shareholder.
As a result, the bank released about $6.4 million to Ford Mart under the L/Cs.
The court also heard that Ford Mart reverted the proceeds to Uni-Art after deducting 0.3 per cent as "handling fee". Uni-Art had subsequently repaid the loans to the bank.
Three other persons, who were also charged in the same case, had earlier absconded.
They were Lai Kam-yau, 72, director of Creative Worth Development Limited, Regent Delta Limited (Regent) and South China Electronics Company Limited (South China); Chan Cheng, 67, director of Regent and South China; and Law Ming, 59, director of South Chi na.
The trio were scheduled to appear in District Court in July this year on two joint charges of conspiracy to defraud, but failed to turn up. Warrants for their arrests were issued by the court.
The prosecution was today represented by Senior Government Counsel Sharman Lam, assisted by ICAC officer David Ng.