SME director and clerk charged with $124m bank loans fraud
2020-5-28
A director and a clerk of a Small and Medium Enterprise (SME) were charged by the ICAC yesterday (May 27) for their alleged roles in defrauding seven banks of 99 loans totalling over $124 million and banking facilities totalling $34.5 million, as well as deceiving a government department and a public body into acting as guarantors for loans and facilities totalling $8.4 million granted by the banks.
Desmond Chan Chi-hung, 59, sole director and shareholder of now defunct Mondex International Industries Limited (MIIL), and Pun Ching-man, 35, clerk of MIIL, jointly face 19 counts of conspiracy to defraud, contrary to Common Law.
The defendants will appear at the Eastern Magistrates’ Courts tomorrow (May 29) for the case to be transferred to the District Court for plea.
The case arose from a corruption complaint. Subsequent ICAC enquiries revealed the above alleged offences, which took place between February 2011 and June 2014.
Upon the request of the de facto owner of MIIL, which purportedly engaged in plastic material trading, Chan became its sole director and shareholder in December 2010. Pun was posted to MIIL by the de facto owner as a clerk responsible for its administration.
To finance business development of local SMEs, various banks, including Bank of China (Hong Kong) Limited (BOCHK), Citibank (Hong Kong) Limited (Citibank HK), Dah Sing Bank Limited (Dah Sing Bank), DBS Bank (Hong Kong) Limited (DBSHK), Industrial and Commercial Bank of China (Asia) Limited (ICBC Asia), The Hongkong and Shanghai Banking Corporation Limited (HSBC) and Wing Lung Bank Limited (Wing Lung Bank) (now known as CMB Wing Lung Bank Limited), offered different types of credit facilities to SMEs.
Between 2008 and 2011, the Trade and Industry Department (TID) and the Hong Kong Mortgage Corporation Limited (HKMC) respectively launched various schemes, including SME Loan Guarantee Scheme (SGS) and SME Financing Guarantee Scheme (SFGS) to assist SMEs to obtain credit facilities from banks by providing guarantees to them.
Eight of the charges allege that Chan and Pun conspired together and with the aforesaid de facto owner of MIIL and a man employed by him (the duo) to defraud BOCHK, Citibank HK, Dah Sing Bank, DBSHK, HSBC and ICBC Asia by dishonestly falsely representing that supporting documents submitted by MIIL in relation to its applications of banking facilities were genuine, causing the six banks to grant banking facilities totalling $34.5 million to MIIL.
Two other charges allege that Chan and Pun conspired together and with the duo to defraud the TID by dishonestly falsely representing that all the information contained in two application forms for Working Capital Loan Guarantee under the SGS was true, accurate and complete.
The defendants have allegedly caused the TID to issue two guarantees in favour of Dah Sing Bank and HSBC; and to act as the guarantor for term loans totalling $2 million granted by the two banks to MIIL.
Three other charges allege that Chan and Pun conspired together and with the duo to defraud the HKMC by dishonestly falsely representing that all the information contained in three application forms for the SFGS was true, accurate and complete.
The defendants are alleged to have caused the HKMC to issue three guarantees in favour of Dah Sing Bank and ICBC Asia; and to act as the guarantor for various types of facilities totalling $6.4 million granted by the two banks to MIIL.
The remaining six charges allege that Chan and Pun conspired together with the duo and other persons unknown to defraud BOCHK, Citibank Hong Kong, Dah Sing Bank, DBSHK, HSBC and Wing Lung Bank by dishonestly submitting supporting documents purportedly in relation to transactions between MIIL and its six suppliers, causing the six banks to grant 99 loans totalling over $124 million to MIIL and to release the sums directly to the six suppliers concerned.
The TID, the HKMC and the seven banks concerned have rendered full assistance to the ICAC during its investigation into the case.
The defendants have been released on ICAC bail, pending their court appearance tomorrow.
Desmond Chan Chi-hung, 59, sole director and shareholder of now defunct Mondex International Industries Limited (MIIL), and Pun Ching-man, 35, clerk of MIIL, jointly face 19 counts of conspiracy to defraud, contrary to Common Law.
The defendants will appear at the Eastern Magistrates’ Courts tomorrow (May 29) for the case to be transferred to the District Court for plea.
The case arose from a corruption complaint. Subsequent ICAC enquiries revealed the above alleged offences, which took place between February 2011 and June 2014.
Upon the request of the de facto owner of MIIL, which purportedly engaged in plastic material trading, Chan became its sole director and shareholder in December 2010. Pun was posted to MIIL by the de facto owner as a clerk responsible for its administration.
To finance business development of local SMEs, various banks, including Bank of China (Hong Kong) Limited (BOCHK), Citibank (Hong Kong) Limited (Citibank HK), Dah Sing Bank Limited (Dah Sing Bank), DBS Bank (Hong Kong) Limited (DBSHK), Industrial and Commercial Bank of China (Asia) Limited (ICBC Asia), The Hongkong and Shanghai Banking Corporation Limited (HSBC) and Wing Lung Bank Limited (Wing Lung Bank) (now known as CMB Wing Lung Bank Limited), offered different types of credit facilities to SMEs.
Between 2008 and 2011, the Trade and Industry Department (TID) and the Hong Kong Mortgage Corporation Limited (HKMC) respectively launched various schemes, including SME Loan Guarantee Scheme (SGS) and SME Financing Guarantee Scheme (SFGS) to assist SMEs to obtain credit facilities from banks by providing guarantees to them.
Eight of the charges allege that Chan and Pun conspired together and with the aforesaid de facto owner of MIIL and a man employed by him (the duo) to defraud BOCHK, Citibank HK, Dah Sing Bank, DBSHK, HSBC and ICBC Asia by dishonestly falsely representing that supporting documents submitted by MIIL in relation to its applications of banking facilities were genuine, causing the six banks to grant banking facilities totalling $34.5 million to MIIL.
Two other charges allege that Chan and Pun conspired together and with the duo to defraud the TID by dishonestly falsely representing that all the information contained in two application forms for Working Capital Loan Guarantee under the SGS was true, accurate and complete.
The defendants have allegedly caused the TID to issue two guarantees in favour of Dah Sing Bank and HSBC; and to act as the guarantor for term loans totalling $2 million granted by the two banks to MIIL.
Three other charges allege that Chan and Pun conspired together and with the duo to defraud the HKMC by dishonestly falsely representing that all the information contained in three application forms for the SFGS was true, accurate and complete.
The defendants are alleged to have caused the HKMC to issue three guarantees in favour of Dah Sing Bank and ICBC Asia; and to act as the guarantor for various types of facilities totalling $6.4 million granted by the two banks to MIIL.
The remaining six charges allege that Chan and Pun conspired together with the duo and other persons unknown to defraud BOCHK, Citibank Hong Kong, Dah Sing Bank, DBSHK, HSBC and Wing Lung Bank by dishonestly submitting supporting documents purportedly in relation to transactions between MIIL and its six suppliers, causing the six banks to grant 99 loans totalling over $124 million to MIIL and to release the sums directly to the six suppliers concerned.
The TID, the HKMC and the seven banks concerned have rendered full assistance to the ICAC during its investigation into the case.
The defendants have been released on ICAC bail, pending their court appearance tomorrow.