Ex-financial controller of listed company jailed for $2.6m bribery and fraud
2020-4-3
A former financial controller of a listed company, charged by the ICAC, was today (April 3) sentenced to three years and seven months’ imprisonment at the District Court for conspiracy to accept an illegal rebate of about $590,000 for engaging an accounting firm to provide services, and defrauding the listed company of over $2 million by outsourcing other services to a consultant firm owned by him.
Lau Ka-chung, 44, former financial controller cum company secretary of Southeast Asia Properties & Finance Limited (Southeast Asia Properties), was earlier found guilty of two charges – one of conspiracy for an agent to accept advantages, contrary to Section 9(1)(a) of the Prevention of Bribery Ordinance and Section 159A of the Crimes Ordinance, and one of fraud, contrary to Section 16A of the Theft Ordinance.
In sentencing, Judge Katherine Lo Kit-yee said the case involved a serious conflict of interest and breach of trust.
The judge also remarked that the case had damaged the governance of the listed company involved, and tarnished Hong Kong’s reputation as a financial centre.
In addition, the judge ordered the defendant to pay about $590,000, being the amount of the bribe he accepted, as restitution to Southeast Asia Properties.
The court heard that at the material time, the defendant was the financial controller cum company secretary of Southeast Asia Properties. He was the head of its accounts department, which handled all accounting and financial matters of Southeast Asia Properties and its subsidiaries.
In May 2015, Southeast Asia Properties resolved to acquire a company at a consideration of over $336 million. The defendant suggested outsourcing the preparation work to an independent third party. The proposal was agreed by Southeast Asia Properties.
The defendant then outsourced the internal control review, taxation, financial advisory and consultancy services in relation to the acquisition to an accounting firm.
Between May 2015 and June 2016, Southeast Asia Properties and its subsidiaries released payments totalling $754,000 to the accounting firm for its services. Out of the $754,000, a total of about $590,000 was eventually transferred to the defendant’s bank account while the remaining sum was retained by the accounting firm.
The court also heard that on June 19, 2015, the defendant set up Wishful Bright Enterprise Consultancy Limited (Wishful Bright), of which he was its sole director cum shareholder.
Without disclosing his interest in Wishful Bright and obtaining quotations from other contractors, the defendant caused Southeast Asia Properties and its subsidiaries to engage Wishful Bright to provide various accounting, taxation, research, financial advisory and consultancy services between June 2015 and October 2016.
As the head of Southeast Asia Properties’ accounts department, the defendant endorsed and approved the payments of 15 invoices issued by Wishful Bright. As a result, a total of over $2 million was released to Wishful Bright.
Had Southeast Asia Properties known that the defendant was the director of Wishful Bright or held any interest in it, Southeast Asia Properties would not have engaged Wishful Bright to provide those services and settled the payments.
Southeast Asia Properties had rendered full assistance to the ICAC during its investigation into the case.
The prosecution was today represented by prosecuting counsel Dr Alain Sham, assisted by ICAC officers Oyan Cheung and Janice Chan.
Lau Ka-chung, 44, former financial controller cum company secretary of Southeast Asia Properties & Finance Limited (Southeast Asia Properties), was earlier found guilty of two charges – one of conspiracy for an agent to accept advantages, contrary to Section 9(1)(a) of the Prevention of Bribery Ordinance and Section 159A of the Crimes Ordinance, and one of fraud, contrary to Section 16A of the Theft Ordinance.
In sentencing, Judge Katherine Lo Kit-yee said the case involved a serious conflict of interest and breach of trust.
The judge also remarked that the case had damaged the governance of the listed company involved, and tarnished Hong Kong’s reputation as a financial centre.
In addition, the judge ordered the defendant to pay about $590,000, being the amount of the bribe he accepted, as restitution to Southeast Asia Properties.
The court heard that at the material time, the defendant was the financial controller cum company secretary of Southeast Asia Properties. He was the head of its accounts department, which handled all accounting and financial matters of Southeast Asia Properties and its subsidiaries.
In May 2015, Southeast Asia Properties resolved to acquire a company at a consideration of over $336 million. The defendant suggested outsourcing the preparation work to an independent third party. The proposal was agreed by Southeast Asia Properties.
The defendant then outsourced the internal control review, taxation, financial advisory and consultancy services in relation to the acquisition to an accounting firm.
Between May 2015 and June 2016, Southeast Asia Properties and its subsidiaries released payments totalling $754,000 to the accounting firm for its services. Out of the $754,000, a total of about $590,000 was eventually transferred to the defendant’s bank account while the remaining sum was retained by the accounting firm.
The court also heard that on June 19, 2015, the defendant set up Wishful Bright Enterprise Consultancy Limited (Wishful Bright), of which he was its sole director cum shareholder.
Without disclosing his interest in Wishful Bright and obtaining quotations from other contractors, the defendant caused Southeast Asia Properties and its subsidiaries to engage Wishful Bright to provide various accounting, taxation, research, financial advisory and consultancy services between June 2015 and October 2016.
As the head of Southeast Asia Properties’ accounts department, the defendant endorsed and approved the payments of 15 invoices issued by Wishful Bright. As a result, a total of over $2 million was released to Wishful Bright.
Had Southeast Asia Properties known that the defendant was the director of Wishful Bright or held any interest in it, Southeast Asia Properties would not have engaged Wishful Bright to provide those services and settled the payments.
Southeast Asia Properties had rendered full assistance to the ICAC during its investigation into the case.
The prosecution was today represented by prosecuting counsel Dr Alain Sham, assisted by ICAC officers Oyan Cheung and Janice Chan.