Ex-listed company executives guilty of $12m consultancy fraud
2009-2-4
Two former top executives of a publicly listed telecommunications company, charged by the ICAC, were today (Wednesday) convicted at the District Court of conspiracy to defraud the company and its subsidiaries of $12 million in consultancy fees through bog us agreements.
Hau Tung-ying, 54, former chairman of China Motion Telecom International Limited (CMT), and Li Bin, 40, former executive director of CMT, were found guilty of one count of conspiracy to defraud.
Judge Kevin Browne adjourned the case until February 10 for mitigation, and remanded the defendants in the custody of the Correctional Services Department.
The case arose from a corruption complaint. Subsequent ICAC enquiries revealed the conspiracy offence.
The court heard that between September 2000 and April 2005, the defendants conspired with other persons to defraud CMT and its two wholly owned subsidiaries –'96 ChinaMotion NetCom (Asia) Limited (NetCom) and China Motion Holdings Limited (CMHL).
Without the knowledge of the board of directors, the defendants dishonestly caused NetCom to enter into three consultancy agreements with two contractors, Bioroad Developments Limited and Headwise International Limited.
According to the agreements, the contractors would provide professional services for the operation of NetCom in Asia Pacific and North America at a monthly consultancy fee ranging from $100,000 to $432,000.
In fact, the contractors, under the control of the defendants, had never provided NetCom with any consultancy services.
NetCom, CMHL and CMT, however, were caused to release payments totalling $12 million under the consultancy agreements, the court was told.
CMT had rendered full co-operation and assistance to the ICAC in the investigation.
The prosecution was today represented by prosecuting counsel Audrey Campbell-Moffat, assisted by ICAC officer Martin Lee.
Hau Tung-ying, 54, former chairman of China Motion Telecom International Limited (CMT), and Li Bin, 40, former executive director of CMT, were found guilty of one count of conspiracy to defraud.
Judge Kevin Browne adjourned the case until February 10 for mitigation, and remanded the defendants in the custody of the Correctional Services Department.
The case arose from a corruption complaint. Subsequent ICAC enquiries revealed the conspiracy offence.
The court heard that between September 2000 and April 2005, the defendants conspired with other persons to defraud CMT and its two wholly owned subsidiaries –'96 ChinaMotion NetCom (Asia) Limited (NetCom) and China Motion Holdings Limited (CMHL).
Without the knowledge of the board of directors, the defendants dishonestly caused NetCom to enter into three consultancy agreements with two contractors, Bioroad Developments Limited and Headwise International Limited.
According to the agreements, the contractors would provide professional services for the operation of NetCom in Asia Pacific and North America at a monthly consultancy fee ranging from $100,000 to $432,000.
In fact, the contractors, under the control of the defendants, had never provided NetCom with any consultancy services.
NetCom, CMHL and CMT, however, were caused to release payments totalling $12 million under the consultancy agreements, the court was told.
CMT had rendered full co-operation and assistance to the ICAC in the investigation.
The prosecution was today represented by prosecuting counsel Audrey Campbell-Moffat, assisted by ICAC officer Martin Lee.