Duty-free store duo charged by ICAC jailed for conspiracy to defraud over $12m inflated prices red wine purchases
2025-4-29
Two former senior executives of a duty-free chain store, charged by the ICAC with conspiracy to defraud, were today (April 29) sentenced at the District Court to jail terms of 57 months and 14 months respectively for concealing their conflicting interest in companies set up by them over purchase and resell of bottled red wine sourced from a French supplier by inflating the prices by $12 million.
Au Tsz-kei, 71, former merchandising and buying director of Sky Connection Limited (Sky Connection), was sentenced to 57 months’ imprisonment. He was earlier found guilty of one count of conspiracy to defraud, contrary to the Common Law.
Co-defendant Lau Shu-yin, 78, former general manager of Sky Connection, who earlier pleaded guilty to the offence, was today jailed for 14 months.
In sentencing, Judge Mr Clement Lee Hing-nin remarked that he took a starting point of eight years’ imprisonment in the present case as the duo committed a premeditated crime spanning over six years involving a defrauded sum of over $1.2 million. Their sentences were reduced, having considered their mitigations, including the fact that they had both reached the age of 70 during the trial and the restitution of their personal gains to Sky Connection. Lau received a further reduction in his jail term in view of his guilty plea and his assistance rendered to the prosecution in the trial.
The present case arose from a corruption complaint received by the ICAC in mid-2019. At the material time, Sky Connection sold duty-free goods under the business name “Free Duty”. The merchandising and buying department, headed by Au, used to source bottled red wine from a winery in France directly for sale at “Free Duty” shops.
The court heard that since August 2004, the two defendants had arranged Sky Connection to place purchase orders with the French winery via Jetfair Development Limited (Jetfair) and Master Good Trading Limited (Master Good). Between August 2004 and May 2011, Sky Connection had placed 56 purchase orders incurring payments totalling over $26 million through Jetfair and Master Good. ICAC enquiries revealed that Jetfair and Master Good had actually sourced the 56 batches of bottled red wine 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.
The ICAC investigation also revealed that Master Good and Jetfair were in fact funded by individuals including Au and Lau. Lau and his daughter were respectively the sole shareholder-cum-director of Master Good and Jetfair. Sky Connection required its staff to declare any conflict of interest and prohibited them from engaging in any business which might have a conflict with the company. But Au and Lau had never disclosed to Sky Connection their associations with Master Good and Jetfair.
In addition, Au and Lau each shared part of the generated profits in the scam under an agreement. Lau had earlier admitted that he had received $2 million in total.
Sky Connection rendered full assistance to the ICAC during its investigation into the case.
The prosecution was today represented by Senior Public Prosecutor Mickey Fung, assisted by ICAC officer May Lam.
Au Tsz-kei, 71, former merchandising and buying director of Sky Connection Limited (Sky Connection), was sentenced to 57 months’ imprisonment. He was earlier found guilty of one count of conspiracy to defraud, contrary to the Common Law.
Co-defendant Lau Shu-yin, 78, former general manager of Sky Connection, who earlier pleaded guilty to the offence, was today jailed for 14 months.
In sentencing, Judge Mr Clement Lee Hing-nin remarked that he took a starting point of eight years’ imprisonment in the present case as the duo committed a premeditated crime spanning over six years involving a defrauded sum of over $1.2 million. Their sentences were reduced, having considered their mitigations, including the fact that they had both reached the age of 70 during the trial and the restitution of their personal gains to Sky Connection. Lau received a further reduction in his jail term in view of his guilty plea and his assistance rendered to the prosecution in the trial.
The present case arose from a corruption complaint received by the ICAC in mid-2019. At the material time, Sky Connection sold duty-free goods under the business name “Free Duty”. The merchandising and buying department, headed by Au, used to source bottled red wine from a winery in France directly for sale at “Free Duty” shops.
The court heard that since August 2004, the two defendants had arranged Sky Connection to place purchase orders with the French winery via Jetfair Development Limited (Jetfair) and Master Good Trading Limited (Master Good). Between August 2004 and May 2011, Sky Connection had placed 56 purchase orders incurring payments totalling over $26 million through Jetfair and Master Good. ICAC enquiries revealed that Jetfair and Master Good had actually sourced the 56 batches of bottled red wine 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.
The ICAC investigation also revealed that Master Good and Jetfair were in fact funded by individuals including Au and Lau. Lau and his daughter were respectively the sole shareholder-cum-director of Master Good and Jetfair. Sky Connection required its staff to declare any conflict of interest and prohibited them from engaging in any business which might have a conflict with the company. But Au and Lau had never disclosed to Sky Connection their associations with Master Good and Jetfair.
In addition, Au and Lau each shared part of the generated profits in the scam under an agreement. Lau had earlier admitted that he had received $2 million in total.
Sky Connection rendered full assistance to the ICAC during its investigation into the case.
The prosecution was today represented by Senior Public Prosecutor Mickey Fung, assisted by ICAC officer May Lam.