Two senior executives of construction companies charged by ICAC in $75.3m L/C scam found guilty
2022-4-23
Two senior executives of two construction companies, charged by the ICAC, were today (April 23) convicted at the District Court of conspiracy to defraud for their roles in a $75.3 million letters of credit (L/Cs) scam, and laundering over $10 million in crime proceeds.
Wang Xiaoshan, 53, deputy general manager of China Railway Construction (HK) Limited (CRCL); and Lau Chung-hoi, 55, director of now defunct Top Famous Construction Engineering Limited (TFCL), were found guilty of one count of conspiracy to defraud, contrary to Common Law.
Lau was further convicted of two counts of dealing with property known or believed to represent proceeds of indictable offence, contrary to Section 25(1) of the Organized and Serious Crimes Ordinance.
Deputy Judge Mr Charles Chan adjourned the case to May 21 for mitigation. The defendants were remanded in the custody of the Correctional Services Department.
CRCL is a subsidiary of publicly listed China Railway Construction Corporation Limited (CRCC). China Railway International Trading (HK) Limited (CRITL) is another wholly owned subsidiary of CRCC, which is run by staff members of CRCL to source construction materials for CRCL and its associated companies.
The court heard that at the material time, Wang was a deputy general manager of CRCL responsible for business development, while Lau was a director of TFCL.
In September 2016, Wang arranged TFCL and CRCL to sign a memorandum of understanding (MOU) to form joint ventures to take up certain construction projects. Afterwards, TFCL requested CRCL to assist in financing its purchase of materials and CRCL agreed.
In December 2016, Wang arranged TFCL to further enter into three trade agreements with CRITL whereby CRITL would act as TFCL’s purchasing agent for procuring construction materials from a supplier for three construction projects, and payments would be settled by L/Cs granted by DBS Bank Limited (DBS Bank) to CRCL.
In January 2017, CRITL submitted three applications to DBS Bank for issuing three L/Cs in favour of the above supplier. Between January and March 2017, Lau had produced documents, including invoices of construction materials, packing lists and cargo receipts to support the relevant procurements. As a result, DBS Bank approved all of the applications and released three L/Cs payments totalling HK$75.3 million to the supplier.
ICAC inquiries revealed that there was no such trade transaction. Wang arranged signing of the MOU and the three trade agreements to procure granting of the above L/Cs. The supporting documents produced by Lau were false documents and he had dealt with proceeds totalling HK$10.5 million arising from the scam.
CRCC, CRCL, CRITL and DBS Bank had rendered full assistance to the ICAC during its investigation.
The prosecution was today represented by prosecuting counsel Derek Chan SC and prosecuting counsel Olivia Tsang, assisted by ICAC officers Raymond Yung and Eddie Chu.
Wang Xiaoshan, 53, deputy general manager of China Railway Construction (HK) Limited (CRCL); and Lau Chung-hoi, 55, director of now defunct Top Famous Construction Engineering Limited (TFCL), were found guilty of one count of conspiracy to defraud, contrary to Common Law.
Lau was further convicted of two counts of dealing with property known or believed to represent proceeds of indictable offence, contrary to Section 25(1) of the Organized and Serious Crimes Ordinance.
Deputy Judge Mr Charles Chan adjourned the case to May 21 for mitigation. The defendants were remanded in the custody of the Correctional Services Department.
CRCL is a subsidiary of publicly listed China Railway Construction Corporation Limited (CRCC). China Railway International Trading (HK) Limited (CRITL) is another wholly owned subsidiary of CRCC, which is run by staff members of CRCL to source construction materials for CRCL and its associated companies.
The court heard that at the material time, Wang was a deputy general manager of CRCL responsible for business development, while Lau was a director of TFCL.
In September 2016, Wang arranged TFCL and CRCL to sign a memorandum of understanding (MOU) to form joint ventures to take up certain construction projects. Afterwards, TFCL requested CRCL to assist in financing its purchase of materials and CRCL agreed.
In December 2016, Wang arranged TFCL to further enter into three trade agreements with CRITL whereby CRITL would act as TFCL’s purchasing agent for procuring construction materials from a supplier for three construction projects, and payments would be settled by L/Cs granted by DBS Bank Limited (DBS Bank) to CRCL.
In January 2017, CRITL submitted three applications to DBS Bank for issuing three L/Cs in favour of the above supplier. Between January and March 2017, Lau had produced documents, including invoices of construction materials, packing lists and cargo receipts to support the relevant procurements. As a result, DBS Bank approved all of the applications and released three L/Cs payments totalling HK$75.3 million to the supplier.
ICAC inquiries revealed that there was no such trade transaction. Wang arranged signing of the MOU and the three trade agreements to procure granting of the above L/Cs. The supporting documents produced by Lau were false documents and he had dealt with proceeds totalling HK$10.5 million arising from the scam.
CRCC, CRCL, CRITL and DBS Bank had rendered full assistance to the ICAC during its investigation.
The prosecution was today represented by prosecuting counsel Derek Chan SC and prosecuting counsel Olivia Tsang, assisted by ICAC officers Raymond Yung and Eddie Chu.