Ex-senior executive duo of duty-free chain store charged by ICAC over $26m red wine purchase fraud
2022-7-25
Two former senior executive of a duty-free chain store were charged by the ICAC today (July 25) with conspiracy to defraud for allegedly inflating bottled red wine sourced from a French supplier by over $12 million and reselling them to the chain store at over $26 million.
Au Tsz-kei, 68, former merchandising and buying director of Sky Connection Limited (Sky Connection); and Lau Shu-yin, 75, former general manager of Sky Connection, jointly face one count of conspiracy to defraud, contrary to Common Law.
The defendants were released on ICAC bail, pending their appearance in the West Kowloon Magistrates’ Courts on Wednesday (July 27) for the case to be transferred to the District Court.
The ICAC investigation arose from a corruption complaint. The duo were charged upon legal advice sought from the Department of Justice after completion of the investigation.
The alleged offence took place between August 2004 and May 2011. At the material time, Sky Connection sold duty-free goods under the business name “Free Duty”. The merchandising and buying department of Sky Connection, headed by Au, was responsible for sourcing wine and tobacco for sale at “Free Duty” shops. A winery in France was one of the vendors supplying bottled red wine to Sky Connection.
The charge alleges that the defendants conspired with a then chief executive officer of Sky Connection and a then subordinate buyer of Au to defraud the company by dishonestly causing it to place purchase orders for bottled red wine with Jetfair Development Limited (Jetfair) and Master Good Trading Limited (Master Good) instead of with the above French winery, thereby inducing Sky Connection to pay inflated prices for those red wine.
During the above period, Sky Connection had placed 56 purchase orders for bottled red wine with Jetfair and Master Good at over $26 million. It is alleged that Jetfair and Master Good had sourced the bottled red wine concerned from the French winery at over $14 million and resold them to Sky Connection at inflated prices, causing Sky Connection to make extra payments of over $12 million.
ICAC investigation revealed that Lau and his daughter were the respective sole shareholder-cum-director of Master Good and Jetfair at the material time. It is alleged that Lau had never disclosed to Sky Connection his association with the two companies.
Sky Connection has rendered full assistance to the ICAC during its investigation into the case.
Au Tsz-kei, 68, former merchandising and buying director of Sky Connection Limited (Sky Connection); and Lau Shu-yin, 75, former general manager of Sky Connection, jointly face one count of conspiracy to defraud, contrary to Common Law.
The defendants were released on ICAC bail, pending their appearance in the West Kowloon Magistrates’ Courts on Wednesday (July 27) for the case to be transferred to the District Court.
The ICAC investigation arose from a corruption complaint. The duo were charged upon legal advice sought from the Department of Justice after completion of the investigation.
The alleged offence took place between August 2004 and May 2011. At the material time, Sky Connection sold duty-free goods under the business name “Free Duty”. The merchandising and buying department of Sky Connection, headed by Au, was responsible for sourcing wine and tobacco for sale at “Free Duty” shops. A winery in France was one of the vendors supplying bottled red wine to Sky Connection.
The charge alleges that the defendants conspired with a then chief executive officer of Sky Connection and a then subordinate buyer of Au to defraud the company by dishonestly causing it to place purchase orders for bottled red wine with Jetfair Development Limited (Jetfair) and Master Good Trading Limited (Master Good) instead of with the above French winery, thereby inducing Sky Connection to pay inflated prices for those red wine.
During the above period, Sky Connection had placed 56 purchase orders for bottled red wine with Jetfair and Master Good at over $26 million. It is alleged that Jetfair and Master Good had sourced the bottled red wine concerned from the French winery at over $14 million and resold them to Sky Connection at inflated prices, causing Sky Connection to make extra payments of over $12 million.
ICAC investigation revealed that Lau and his daughter were the respective sole shareholder-cum-director of Master Good and Jetfair at the material time. It is alleged that Lau had never disclosed to Sky Connection his association with the two companies.
Sky Connection has rendered full assistance to the ICAC during its investigation into the case.