Ex-manager of lighting product company charged by ICAC jailed for 56 months over $12m fraud


A former manager of a lighting product company, charged by the ICAC, was today (September 29) sentenced to 56 months’ imprisonment at the District Court for defrauding his then employer by concealing his wife’s interest in a trading company when handling transactions between the two companies involving sums of discount and subsidy totalling about $12 million.

Leung Chun-hei, 41, former senior sales manager of Philips Lighting Hong Kong Limited (Philips Lighting), earlier pleaded guilty to one count of fraud, contrary to Section 16A(1) of the Theft Ordinance.

In sentencing, Judge Mrs Adriana Noelle Tse Ching said the defendant had intentionally and premeditatedly deceived the company. His acts constituted a breach of trust and were no different from theft.

The ICAC investigation arose from a corruption complaint. Subsequent enquiries revealed the above offence.

The court heard that Philips Electronics Hong Kong Limited (Philips Electronics) was a company which supplied electronic products, including lighting products. The defendant joined Philips Electronics in April 2003. In February 2016, the defendant was transferred to Philips Lighting after it was set up to specialise in selling lighting products.

During his employment with Philips Lighting, the defendant was responsible for handling orders placed by customers, including Supreme Profits International Limited (Supreme Profits)—a trading company in which his wife was the sole shareholder-cum-director. He was authorised to utilise promotion funds for clients to subsidise or give discount to Supreme Profits.

Between February 2016 and November 2018, Supreme Profits had placed 3,848 purchase orders with Philips Lighting for total invoiced amount of about $107 million. During the period, a total sum of about $12 million from the promotion funds was used to subsidise Supreme Profits.

The court heard that when the defendant joined Philips Electronics, he acknowledged receipt of a booklet of General Business Principles which stipulated that employees should promptly disclose any personal financial interest direct or indirect via a family member or acquaintance which could give rise to a conflict of interest.

In 2016, 2017 and 2018, the defendant attended training conducted by an in-house legal counsel of Philips Lighting during which attendees were reminded to report any actual or potential conflict of interest to the company. But the defendant had never made any declaration to the company about his wife’s role and interest in Supreme Profits.

Had Philips Lighting known that the defendant’s wife was the owner of Supreme Profits, it would have assigned other staff members to handle the transactions with Supreme Profits, and that it would not have agreed to the defendant’s suggestion to use the promotion funds to subsidise Supreme Profits.

Philips Electronics and Philips Lighting had rendered full assistance to the ICAC during its investigation into the case.

The prosecution was today represented by Senior Public Prosecutor Anthea Kwok, assisted by ICAC officer Ray Chan.
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