SME director and clerk charged with $102m bank loans fraud
2020-9-2
A director and a former clerk of a Small and Medium Enterprise (SME) have been charged by the ICAC today (September 2) for their alleged roles in defrauding four banks of 83 loans totalling over $102 million and banking facilities totalling $31 million, as well as deceiving a government department and a public body into acting as guarantors for loans and facilities totalling $11 million granted by the banks.
Chan Wing-fuk, 60, sole director and shareholder of now defunct Waty International Company Limited (WICL), and Wong Tsz-wa, 28, former accounting clerk of WICL, jointly face six counts of conspiracy to defraud, contrary to Common Law. Chan further faces 14 other counts of conspiracy to defraud.
The defendants will appear in the Eastern Magistrates’ Courts on Friday (September 4) for the case to be transferred to the District Court for plea.
The case arose from a corruption complaint. Subsequent ICAC enquiries revealed the above alleged offences took place between September 2010 and January 2015.
In July 2009, Chan became the sole director and shareholder of WICL, a trading company which did not have any actual business, upon the invitation of its de facto owner. Between October 2012 and August 2014, Wong was the only accounting clerk of WICL who acted on its de facto owner’s instructions to handle accounting matters.
To finance business development of local SMEs, various banks, including Citibank (Hong Kong) Limited (Citibank HK), Dah Sing Bank, Limited (Dah Sing Bank), DBS Bank (Hong Kong) Limited (DBSHK) and The Hongkong and Shanghai Banking Corporation Limited (HSBC), offered a variety 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 to them.
Six of the charges allege that Chan / Chan and Wong conspired together with the aforesaid de facto owner of WICL and his female associate (the duo) to defraud Dah Sing Bank, DBSHK and HSBC by dishonestly falsely representing that supporting documents submitted by WICL in relation to its applications of banking facilities were genuine, causing the three banks to grant banking facilities totalling $31 million to WICL.
Five other charges allege that Chan / Chan and Wong conspired together with the duo to defraud the TID by dishonestly falsely representing that all the information contained in five application forms for the SGS and SpGS was true, accurate and complete, causing the TID to issue five guarantees in favour of Dah Sing Bank, DBSHK and HSBC; and to act as the guarantor for various types of loans and facilities totalling $7 million granted by the three banks to WICL.
Two other charges allege that Chan conspired together with the duo to defraud the HKMC by dishonestly falsely representing that all the information contained in two application forms for the SFGS was true, accurate and complete, causing the HKMC to issue two guarantees in favour of HSBC; and to act as the guarantor for a term loan and an overdraft facility totalling $4 million granted by the bank to WICL.
Seven remaining charges allege that Chan / Chan and Wong conspired together and with the duo to defraud Citibank HK, Dah Sing Bank, DBSHK and HSBC by dishonestly submitting supporting documents purportedly in relation to transactions between WICL and its seven suppliers, causing the four banks to grant 83 loans totalling over $102 million to WICL and to release the sums directly to the seven suppliers concerned.
The TID, the HKMC and the four banks concerned have rendered full assistance to the ICAC during its investigation into the case.
The defendants have been released on ICAC bail, pending their court appearance on Friday.
Chan Wing-fuk, 60, sole director and shareholder of now defunct Waty International Company Limited (WICL), and Wong Tsz-wa, 28, former accounting clerk of WICL, jointly face six counts of conspiracy to defraud, contrary to Common Law. Chan further faces 14 other counts of conspiracy to defraud.
The defendants will appear in the Eastern Magistrates’ Courts on Friday (September 4) for the case to be transferred to the District Court for plea.
The case arose from a corruption complaint. Subsequent ICAC enquiries revealed the above alleged offences took place between September 2010 and January 2015.
In July 2009, Chan became the sole director and shareholder of WICL, a trading company which did not have any actual business, upon the invitation of its de facto owner. Between October 2012 and August 2014, Wong was the only accounting clerk of WICL who acted on its de facto owner’s instructions to handle accounting matters.
To finance business development of local SMEs, various banks, including Citibank (Hong Kong) Limited (Citibank HK), Dah Sing Bank, Limited (Dah Sing Bank), DBS Bank (Hong Kong) Limited (DBSHK) and The Hongkong and Shanghai Banking Corporation Limited (HSBC), offered a variety 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 to them.
Six of the charges allege that Chan / Chan and Wong conspired together with the aforesaid de facto owner of WICL and his female associate (the duo) to defraud Dah Sing Bank, DBSHK and HSBC by dishonestly falsely representing that supporting documents submitted by WICL in relation to its applications of banking facilities were genuine, causing the three banks to grant banking facilities totalling $31 million to WICL.
Five other charges allege that Chan / Chan and Wong conspired together with the duo to defraud the TID by dishonestly falsely representing that all the information contained in five application forms for the SGS and SpGS was true, accurate and complete, causing the TID to issue five guarantees in favour of Dah Sing Bank, DBSHK and HSBC; and to act as the guarantor for various types of loans and facilities totalling $7 million granted by the three banks to WICL.
Two other charges allege that Chan conspired together with the duo to defraud the HKMC by dishonestly falsely representing that all the information contained in two application forms for the SFGS was true, accurate and complete, causing the HKMC to issue two guarantees in favour of HSBC; and to act as the guarantor for a term loan and an overdraft facility totalling $4 million granted by the bank to WICL.
Seven remaining charges allege that Chan / Chan and Wong conspired together and with the duo to defraud Citibank HK, Dah Sing Bank, DBSHK and HSBC by dishonestly submitting supporting documents purportedly in relation to transactions between WICL and its seven suppliers, causing the four banks to grant 83 loans totalling over $102 million to WICL and to release the sums directly to the seven suppliers concerned.
The TID, the HKMC and the four banks concerned have rendered full assistance to the ICAC during its investigation into the case.
The defendants have been released on ICAC bail, pending their court appearance on Friday.