Trio guilty of fraud and money laundering over acquisition of farms
2016-4-29
Two former senior executives of a listed company and a businesswoman, charged by the ICAC, were today (Friday) convicted by a jury at the Court of First Instance of conspiracy to defraud in relation to the acquisition of dairy farms in New Zealand and laundering over HK$85 million being proceeds of the fraud scams.
The defendants were Chen Keen, 48, former executive director and joint-chairman of listed Natural Dairy (NZ) Holdings Limited (NDNZ), formerly known as China Jin Hui Mining Corporation Limited (CJHM); Hao May, formerly known as Wang May-yan, 53, owner and operator of UBNZ Trustee Limited (UBTL); and Yee Wenjye, 44, former vice-president of NDNZ.
Chen, Hao and Yee were found guilty by the jury of two counts of conspiracy to defraud, contrary to Common Law, while Chen alone was convicted of one count of dealing with property known or reasonably believed to represent proceeds of an indictable offence, contrary to Section 25(1) of the Organized and Serious Crimes Ordinance.
Madam Justice Anthea Pang Po-kam adjourned the case to May 31 this year for mitigation and sentence, and remanded the defendants in custody of the Correctional Services Department.
The case arose from a corruption complaint. Subsequent ICAC enquiries revealed the above offences.
The court heard that at the material time, CJHM was listed on the Main Board of the Stock Exchange of Hong Kong (SEHK) and engaged in the trading of iron ore. CJHM was renamed to NDNZ on October 14, 2009.
Chen joined CJHM as executive director and joint chairman on May 7, 2009, while Yee was its vice-president. Apart from being the owner and operator of UBTL, Hao also owned beneficial interests in its affiliated companies – UBNZ Assets Holdings Limited (UBAH) and UBNZ Funds Management Limited (UBFM).
The court heard that between May 7 and September 8, 2009, Chen, Hao and Yee conspired together to defraud the SEHK.
They falsely represented that UBTL, UBFM and their respective ultimate beneficial owners were independent third parties to CJHM and its connected persons, and that there was no existing or prior relationship or understanding between Chen and Hao with respect to the acquisition of the entire issued share capital of UBAH by CJHM from UBTL.
They concealed or failed to declare that Chen had an interest in the acquisition, in that Chen and Hao were parties to an agreement signed between them and Latitude Asia Limited to share the commission arising from the sale and purchase of dairy farms owned by the CraFarms Group in New Zealand.
They also falsely represented that the gross profit of the properties and fixed assets relating to dairy farms owned by the CraFarms Group for the year ended May 31, 2009 was approximately HK$92.52 million; and concealed or failed to disclose their true financial position.
As a result, SEHK was caused to allow CJHM to publish an announcement and a circular in relation to the acquisition which contained the false representations.
The court heard that between May 7, 2009 and July 19, 2010, Chen, Hao and Yee conspired together to defraud CJHM and its existing shareholders by using similar fraudulent means.
They caused CJHM and its existing shareholders to approve the agreement for the acquisition, and caused CJHM to issue and release convertible notes and an optional bond for the payment of the acquisition.
Between March 2 and July 13, 2010, Chen dealt with over HK$85.28 million, knowing or having reasonable grounds to believe that the sum of money represented the proceeds of the fraud scams, the court was told.
The ICAC appreciates the assistance provided by the New Zealand Serious Fraud Office in this case.
The prosecution was today represented by Senior Counsel Charlotte Draycott and Public Prosecutor Joycelyn Ng, assisted by ICAC officers Gary Leung, Fiona Wan, Gary Li and Rachel Wong.
The defendants were Chen Keen, 48, former executive director and joint-chairman of listed Natural Dairy (NZ) Holdings Limited (NDNZ), formerly known as China Jin Hui Mining Corporation Limited (CJHM); Hao May, formerly known as Wang May-yan, 53, owner and operator of UBNZ Trustee Limited (UBTL); and Yee Wenjye, 44, former vice-president of NDNZ.
Chen, Hao and Yee were found guilty by the jury of two counts of conspiracy to defraud, contrary to Common Law, while Chen alone was convicted of one count of dealing with property known or reasonably believed to represent proceeds of an indictable offence, contrary to Section 25(1) of the Organized and Serious Crimes Ordinance.
Madam Justice Anthea Pang Po-kam adjourned the case to May 31 this year for mitigation and sentence, and remanded the defendants in custody of the Correctional Services Department.
The case arose from a corruption complaint. Subsequent ICAC enquiries revealed the above offences.
The court heard that at the material time, CJHM was listed on the Main Board of the Stock Exchange of Hong Kong (SEHK) and engaged in the trading of iron ore. CJHM was renamed to NDNZ on October 14, 2009.
Chen joined CJHM as executive director and joint chairman on May 7, 2009, while Yee was its vice-president. Apart from being the owner and operator of UBTL, Hao also owned beneficial interests in its affiliated companies – UBNZ Assets Holdings Limited (UBAH) and UBNZ Funds Management Limited (UBFM).
The court heard that between May 7 and September 8, 2009, Chen, Hao and Yee conspired together to defraud the SEHK.
They falsely represented that UBTL, UBFM and their respective ultimate beneficial owners were independent third parties to CJHM and its connected persons, and that there was no existing or prior relationship or understanding between Chen and Hao with respect to the acquisition of the entire issued share capital of UBAH by CJHM from UBTL.
They concealed or failed to declare that Chen had an interest in the acquisition, in that Chen and Hao were parties to an agreement signed between them and Latitude Asia Limited to share the commission arising from the sale and purchase of dairy farms owned by the CraFarms Group in New Zealand.
They also falsely represented that the gross profit of the properties and fixed assets relating to dairy farms owned by the CraFarms Group for the year ended May 31, 2009 was approximately HK$92.52 million; and concealed or failed to disclose their true financial position.
As a result, SEHK was caused to allow CJHM to publish an announcement and a circular in relation to the acquisition which contained the false representations.
The court heard that between May 7, 2009 and July 19, 2010, Chen, Hao and Yee conspired together to defraud CJHM and its existing shareholders by using similar fraudulent means.
They caused CJHM and its existing shareholders to approve the agreement for the acquisition, and caused CJHM to issue and release convertible notes and an optional bond for the payment of the acquisition.
Between March 2 and July 13, 2010, Chen dealt with over HK$85.28 million, knowing or having reasonable grounds to believe that the sum of money represented the proceeds of the fraud scams, the court was told.
The ICAC appreciates the assistance provided by the New Zealand Serious Fraud Office in this case.
The prosecution was today represented by Senior Counsel Charlotte Draycott and Public Prosecutor Joycelyn Ng, assisted by ICAC officers Gary Leung, Fiona Wan, Gary Li and Rachel Wong.