SME director gets 44 months’ jail for $25m bank loans fraud
2020-4-17
A director of a Small and Medium Enterprise (SME), charged by the ICAC, was today (April 17) sentenced to 44 months’ imprisonment at the District Court for her role in defrauding five banks of 33 loans totalling about $25 million and banking facilities totalling $22.5 million, as well as deceiving a government department and a public body into acting as guarantors for loans and trade facilities totalling over $15.8 million granted by the banks.
Irene Ng Sio-I, 44, director of Southern Flash Enterprises Limited (Southern Flash), earlier pleaded guilty to 14 counts of conspiracy to defraud, contrary to Common Law.
In sentencing, Judge Mr Tam Sze-lok said although the defendant was not the mastermind, she did play an essential role in the scam which involved a substantial amount of money and lasted a long period of time.
The judge took a starting point of 66 months’ imprisonment. Having considered the defendant’s guilty plea, her jail term was reduced by one-third.
The case arose from a corruption complaint. Subsequent ICAC enquiries revealed the above offences, which took place between February 2010 and February 2013.
The court heard that Southern Flash, an SME purportedly trading audio equipment, was set up by Wong Yim-wah in September 2008. Upon Wong’s invitation in 2009, Ng became the sole director cum shareholder of Southern Flash which was in fact essentially run by Wong and controlled by a de facto owner.
To finance business development of local SMEs, various banks, including DBS Bank (Hong Kong) Limited (DBSHK), Hongkong and Shanghai Banking Corporation Limited (HSBC), Industrial and Commercial Bank of China Limited (ICBC) (now known as Industrial and Commercial Bank of China (Asia) Limited), Dah Sing Bank Limited (Dah Sing Bank) and Wing Hang Bank Limited (Wing Hang) (now known as OCBC Wing Hang Bank Limited), offered different types of credit facilities and loans to SMEs.
Between 2008 and 2011, the Trade and Industry Department (TID) and the Hong Kong Mortgage Corporation Limited (HKMC) respectively launched various schemes, namely SME Loan Guarantee Scheme (SGS), Special Loan Guarantee Scheme (SpGS) and SME Financing Guarantee Scheme (SFGS), to assist SMEs to obtain credit facilities from banks by providing guarantees up to 80% of loans granted to them.
The court heard that Ng conspired with Wong, and the abovementioned de facto owner and a clerk of Southern Flash (the duo) to defraud DBSHK, HSBC, ICBC and Dah Sing Bank, by dishonestly falsely representing that supporting documents submitted by Southern Flash in relation to its applications of banking facilities were genuine, causing the four banks to grant banking facilities totalling $22.5 million to Southern Flash.
Ng had also conspired with Wong and the duo to defraud the TID by dishonestly falsely representing that all the information contained in four application forms for Special Loan Guarantee under the SpGS and an application form for Working Capital Loan Guarantee under the SGS was true, accurate and complete.
As a result, the TID was caused to issue five guarantees in favour of DBSHK, HSBC and Dah Sing Bank; and to act as the guarantor for instalment loans, trade finance related facilities, overdraft facilities and term loans totalling $6.2 million granted by the three banks to Southern Flash.
In addition, Ng conspired with Wong and the duo to defraud the HKMC by dishonestly falsely representing that all the information contained in three application forms for the SFGS was true, accurate and complete.
HKMC was thus caused to issue three guarantees in favour of ICBC and Dah Sing Bank; and to act as the guarantor for import trade facilities or term loans totalling $9.6 million granted by the two banks to Southern Flash.
Ng also conspired with Wong, the duo, six operators of seven purported suppliers of Southern Flash and other persons unknown to defraud Dah Sing Bank and Wing Hang by dishonestly submitting supporting documents purportedly in relation to transactions with Southern Flash.
Dah Sing Bank and Wing Hang were caused to grant 33 loans totalling about $25 million to Southern Flash and to release the sums directly to the seven suppliers concerned, the court heard.
Co-defendant Wong Yim-wah, 67, was jointly charged with Ng with 16 counts of conspiracy to defraud. A warrant of arrest against Wong was issued by the District Court after he failed to attend court on November 14, 2019.
The TID, the HKMC and the five banks concerned had rendered full assistance to the ICAC during its investigation into the case.
The prosecution was today represented by Senior Public Prosecutor Winnie Mok and assisted by ICAC officers Angel Lui and Sunny Chan.
Irene Ng Sio-I, 44, director of Southern Flash Enterprises Limited (Southern Flash), earlier pleaded guilty to 14 counts of conspiracy to defraud, contrary to Common Law.
In sentencing, Judge Mr Tam Sze-lok said although the defendant was not the mastermind, she did play an essential role in the scam which involved a substantial amount of money and lasted a long period of time.
The judge took a starting point of 66 months’ imprisonment. Having considered the defendant’s guilty plea, her jail term was reduced by one-third.
The case arose from a corruption complaint. Subsequent ICAC enquiries revealed the above offences, which took place between February 2010 and February 2013.
The court heard that Southern Flash, an SME purportedly trading audio equipment, was set up by Wong Yim-wah in September 2008. Upon Wong’s invitation in 2009, Ng became the sole director cum shareholder of Southern Flash which was in fact essentially run by Wong and controlled by a de facto owner.
To finance business development of local SMEs, various banks, including DBS Bank (Hong Kong) Limited (DBSHK), Hongkong and Shanghai Banking Corporation Limited (HSBC), Industrial and Commercial Bank of China Limited (ICBC) (now known as Industrial and Commercial Bank of China (Asia) Limited), Dah Sing Bank Limited (Dah Sing Bank) and Wing Hang Bank Limited (Wing Hang) (now known as OCBC Wing Hang Bank Limited), offered different types of credit facilities and loans to SMEs.
Between 2008 and 2011, the Trade and Industry Department (TID) and the Hong Kong Mortgage Corporation Limited (HKMC) respectively launched various schemes, namely SME Loan Guarantee Scheme (SGS), Special Loan Guarantee Scheme (SpGS) and SME Financing Guarantee Scheme (SFGS), to assist SMEs to obtain credit facilities from banks by providing guarantees up to 80% of loans granted to them.
The court heard that Ng conspired with Wong, and the abovementioned de facto owner and a clerk of Southern Flash (the duo) to defraud DBSHK, HSBC, ICBC and Dah Sing Bank, by dishonestly falsely representing that supporting documents submitted by Southern Flash in relation to its applications of banking facilities were genuine, causing the four banks to grant banking facilities totalling $22.5 million to Southern Flash.
Ng had also conspired with Wong and the duo to defraud the TID by dishonestly falsely representing that all the information contained in four application forms for Special Loan Guarantee under the SpGS and an application form for Working Capital Loan Guarantee under the SGS was true, accurate and complete.
As a result, the TID was caused to issue five guarantees in favour of DBSHK, HSBC and Dah Sing Bank; and to act as the guarantor for instalment loans, trade finance related facilities, overdraft facilities and term loans totalling $6.2 million granted by the three banks to Southern Flash.
In addition, Ng conspired with Wong and the duo to defraud the HKMC by dishonestly falsely representing that all the information contained in three application forms for the SFGS was true, accurate and complete.
HKMC was thus caused to issue three guarantees in favour of ICBC and Dah Sing Bank; and to act as the guarantor for import trade facilities or term loans totalling $9.6 million granted by the two banks to Southern Flash.
Ng also conspired with Wong, the duo, six operators of seven purported suppliers of Southern Flash and other persons unknown to defraud Dah Sing Bank and Wing Hang by dishonestly submitting supporting documents purportedly in relation to transactions with Southern Flash.
Dah Sing Bank and Wing Hang were caused to grant 33 loans totalling about $25 million to Southern Flash and to release the sums directly to the seven suppliers concerned, the court heard.
Co-defendant Wong Yim-wah, 67, was jointly charged with Ng with 16 counts of conspiracy to defraud. A warrant of arrest against Wong was issued by the District Court after he failed to attend court on November 14, 2019.
The TID, the HKMC and the five banks concerned had rendered full assistance to the ICAC during its investigation into the case.
The prosecution was today represented by Senior Public Prosecutor Winnie Mok and assisted by ICAC officers Angel Lui and Sunny Chan.