Three jailed for bribery and fraud over acquisition of $500m plantation project
2014-10-9
Two former senior executives of a listed company and another person, charged by the ICAC, were today (Thursday) sentenced to jail terms ranging from three to five years at the Court of First Instance after being convicted by a jury of bribery and fraud in relation to the acquisition of a Mainland plantation project at $500 million.
Choy Ping-fai, 50, former president of China Environmental Resources Group Limited (CERG) (formerly known as Benefun International Holdings Limited (Benefun)), and sole owner of Blackpool Stadium Limited (Blackpool), was jailed for five years.
Co-defendants Lo King-fat, 60, former executive director and company secretary of Benefun; and Ip Wing-lun, 46, certified public accountant, each received a jail term of three years.
Deputy Judge Lugar-Mawson also disqualified the three defendants from being company directors for 10 years.
Choy and Ip were found guilty by the jury of one count of conspiracy to offer advantages to an agent, contrary to Section 9(2)(a) of the Prevention of Bribery Ordinance and Section 159A of the Crimes Ordinance.
Choy and Lo were further convicted by the jury of one count of conspiracy to defraud, contrary to Common Law.
In sentencing, the judge said corruption was a serious offence which needed to be investigated rigorously.
The judge added that the defendants’ acts had undermined the reputation of Hong Kong’s financial industry and its honest business environment.
The court heard that at the material time, Benefun, a company listed on the Stock Exchange of Hong Kong Limited (SEHK), engaged in apparel business, operated with Tan Sim-chew as chairman. Benefun was later renamed CERG.
Blackpool was a British Virgin Islands-registered company owned by Choy, while Ample Rich Enterprises Limited (Ample Rich), a wholly owned subsidiary of Blackpool, held a plantation project on the Mainland.
Between January 1, 2008 and May 14, 2010, Choy and Ip conspired together and with a then accounting staff of Benefun to offer Tan advantages being Benefun’s promissory note to the value of $100 million and the payment of $80 million for the acquisition of Tan’s shareholding in Benefun.
In return, Tan caused Benefun to acquire Ample Rich for the plantation project in Xinjiang, caused Benefun to commit to pay a purchase price of $500 million, and caused change to the constitution of Benefun’s board of directors.
The court also heard that Lo and Choy conspired together and with Tan, Fu Zi-cong, a then executive director of Benefun, and the then accounting staff of Benefun to defraud the SEHK, Benefun, its existing shareholders and potential investors in the course of the acquisition of Ample Rich for the plantation project from Blackpool by concealing their corrupt scheme which was set out in a written agreement with Tan.
Tan and Fu are being wanted by the ICAC for their alleged roles in the case, and warrants have been issued for their arrest.
SEHK and the Securities and Futures Commission had rendered full assistance to the ICAC during its investigation.
The prosecution was today represented by prosecuting counsel Robert Lee, assisted by ICAC officer Andrew Cheung.
Choy Ping-fai, 50, former president of China Environmental Resources Group Limited (CERG) (formerly known as Benefun International Holdings Limited (Benefun)), and sole owner of Blackpool Stadium Limited (Blackpool), was jailed for five years.
Co-defendants Lo King-fat, 60, former executive director and company secretary of Benefun; and Ip Wing-lun, 46, certified public accountant, each received a jail term of three years.
Deputy Judge Lugar-Mawson also disqualified the three defendants from being company directors for 10 years.
Choy and Ip were found guilty by the jury of one count of conspiracy to offer advantages to an agent, contrary to Section 9(2)(a) of the Prevention of Bribery Ordinance and Section 159A of the Crimes Ordinance.
Choy and Lo were further convicted by the jury of one count of conspiracy to defraud, contrary to Common Law.
In sentencing, the judge said corruption was a serious offence which needed to be investigated rigorously.
The judge added that the defendants’ acts had undermined the reputation of Hong Kong’s financial industry and its honest business environment.
The court heard that at the material time, Benefun, a company listed on the Stock Exchange of Hong Kong Limited (SEHK), engaged in apparel business, operated with Tan Sim-chew as chairman. Benefun was later renamed CERG.
Blackpool was a British Virgin Islands-registered company owned by Choy, while Ample Rich Enterprises Limited (Ample Rich), a wholly owned subsidiary of Blackpool, held a plantation project on the Mainland.
Between January 1, 2008 and May 14, 2010, Choy and Ip conspired together and with a then accounting staff of Benefun to offer Tan advantages being Benefun’s promissory note to the value of $100 million and the payment of $80 million for the acquisition of Tan’s shareholding in Benefun.
In return, Tan caused Benefun to acquire Ample Rich for the plantation project in Xinjiang, caused Benefun to commit to pay a purchase price of $500 million, and caused change to the constitution of Benefun’s board of directors.
The court also heard that Lo and Choy conspired together and with Tan, Fu Zi-cong, a then executive director of Benefun, and the then accounting staff of Benefun to defraud the SEHK, Benefun, its existing shareholders and potential investors in the course of the acquisition of Ample Rich for the plantation project from Blackpool by concealing their corrupt scheme which was set out in a written agreement with Tan.
Tan and Fu are being wanted by the ICAC for their alleged roles in the case, and warrants have been issued for their arrest.
SEHK and the Securities and Futures Commission had rendered full assistance to the ICAC during its investigation.
The prosecution was today represented by prosecuting counsel Robert Lee, assisted by ICAC officer Andrew Cheung.