Jailed trio in bribery case ordered to pay $13m in restitutions to tobacco company
2009-9-22
The former chairman of a tobacco manufacturer and two other persons, earlier jailed for bribery and fraud in relation to cigarette smuggling activities, were today (Tuesday) ordered by a District Court judge to pay a total of over $13 million in restituti ons to the tobacco company.
Lu Dayong, 62, former chairman of Nanyang Brothers Tobacco Company Limited (Nanyang Brothers), was earlier sentenced to an imprisonment of four years and six months by Judge Joseph Yau Chi-lap in his absence. Lu absconded and failed to turn up for the tr ial in June last year, and a warrant for his arrest was issued by the court.
Co-conspirators Ko Kit, 40, a director of Hang Chun Trade Development Limited (Hang Chun); and Chan Kai-san, 41, a sales manager of Hang Chun, were respectively jailed for three years and six months, and two years for their roles in the scam.
Judge Yau today allowed the prosecution’s application and ordered Lu and Ko to pay $7.55 million in restitution to Nanyang Brothers.
The judge also ordered Lu, Ko and Chan to pay Nanyang Brothers a restitution of over $5.73 million.
The prosecution’s application for court costs against Lu was also allowed by the judge. The amount of the costs is to be taxed.
Lu and Ko were earlier convicted of one count of conspiracy for an agent to accept an advantage from a cigarette trader, Golden Leaf International Development (Hong Kong) Limited (Golden Leaf), contrary to Section 9(1)(a) of the Prevention of Bribery Ordi nance and Section 159A of the Crimes Ordinance.
Lu, Ko and Chan were found guilty of one count of conspiracy to defraud Nanyang Brothers.
The court heard that Nanyang Brothers, a subsidiary of publicly listed Shanghai Industrial Holdings Limited, manufactured “Double Happiness” cigarettes at a plant in Hong Kong.
Lu, then chairman of Nanyang Brothers, approved Hang Chun and Golden Leaf as overseas distributors for Nanyang Brothers’ cigarettes.
Between November 2003 and February 2004, Lu, Ko and Chan concealed from Nanyang Brothers that Lu had interests in Hang Chun, and caused Nanyang Brothers to supply “Double Happiness” cigarettes to Hang Chun, knowing that the cigarettes would be sold in the Mainland in violation of the contracts between Nangyang Brothers and Hang Chun.
Nanyang Brothers subsequently sold $48 million worth of cigarettes to Hang Chun.
Lu and Ko received $7.55 million in illegal commissions from two directors cum shareholders of Golden Leaf between January 2003 and February 2004 as rewards for causing Nanyang Brothers to sell “Double Happiness” cigarettes worth $42 million to Golden Leaf, the court was told.
The court also heard that the cigarettes sold to Hang Chun and Golden Leaf, which were prohibited from sales in the Mainland, had been smuggled to the Mainland via other places including the Philippines and Vietnam.
In the course of the investigation and subsequent trial, the ICAC had received full co-operation from the management of Nanyang Brothers.
The prosecution was today represented by prosecuting counsel Vania Kam, assisted by ICAC officer Keith Chu.
Lu Dayong, 62, former chairman of Nanyang Brothers Tobacco Company Limited (Nanyang Brothers), was earlier sentenced to an imprisonment of four years and six months by Judge Joseph Yau Chi-lap in his absence. Lu absconded and failed to turn up for the tr ial in June last year, and a warrant for his arrest was issued by the court.
Co-conspirators Ko Kit, 40, a director of Hang Chun Trade Development Limited (Hang Chun); and Chan Kai-san, 41, a sales manager of Hang Chun, were respectively jailed for three years and six months, and two years for their roles in the scam.
Judge Yau today allowed the prosecution’s application and ordered Lu and Ko to pay $7.55 million in restitution to Nanyang Brothers.
The judge also ordered Lu, Ko and Chan to pay Nanyang Brothers a restitution of over $5.73 million.
The prosecution’s application for court costs against Lu was also allowed by the judge. The amount of the costs is to be taxed.
Lu and Ko were earlier convicted of one count of conspiracy for an agent to accept an advantage from a cigarette trader, Golden Leaf International Development (Hong Kong) Limited (Golden Leaf), contrary to Section 9(1)(a) of the Prevention of Bribery Ordi nance and Section 159A of the Crimes Ordinance.
Lu, Ko and Chan were found guilty of one count of conspiracy to defraud Nanyang Brothers.
The court heard that Nanyang Brothers, a subsidiary of publicly listed Shanghai Industrial Holdings Limited, manufactured “Double Happiness” cigarettes at a plant in Hong Kong.
Lu, then chairman of Nanyang Brothers, approved Hang Chun and Golden Leaf as overseas distributors for Nanyang Brothers’ cigarettes.
Between November 2003 and February 2004, Lu, Ko and Chan concealed from Nanyang Brothers that Lu had interests in Hang Chun, and caused Nanyang Brothers to supply “Double Happiness” cigarettes to Hang Chun, knowing that the cigarettes would be sold in the Mainland in violation of the contracts between Nangyang Brothers and Hang Chun.
Nanyang Brothers subsequently sold $48 million worth of cigarettes to Hang Chun.
Lu and Ko received $7.55 million in illegal commissions from two directors cum shareholders of Golden Leaf between January 2003 and February 2004 as rewards for causing Nanyang Brothers to sell “Double Happiness” cigarettes worth $42 million to Golden Leaf, the court was told.
The court also heard that the cigarettes sold to Hang Chun and Golden Leaf, which were prohibited from sales in the Mainland, had been smuggled to the Mainland via other places including the Philippines and Vietnam.
In the course of the investigation and subsequent trial, the ICAC had received full co-operation from the management of Nanyang Brothers.
The prosecution was today represented by prosecuting counsel Vania Kam, assisted by ICAC officer Keith Chu.