Six charged by ICAC over $19m SME guaranteed loan fraud revealed in graft probe


Six directors or proprietors of Small and Medium Enterprises (SMEs) were charged yesterday (June 26) in separate cases after it was revealed in the course of a corruption investigation by the ICAC that they allegedly conspired with others to defraud a bank to approve loans totalling about $19 million to six SMEs through the Special 100% Loan Guarantee (SLG) by making false representations concerning their sales turnovers and employees payrolls.

Each of the six defendants, aged between 44 and 64, faces one count of conspiracy to defraud, contrary to Common Law. They are Yan Hoi-hung, proprietor of Candice Yan & Co.; Tony Fung Kam-fai, director-cum-shareholder of Dragon Win Motors China Company Limited; Tam Sui-kwan, director-cum-shareholder of Skylink Telecommunications Networks Limited; Wong Chin-fai, director of Hongkong Precreate Trading Co., Limited; Arri Wong Ka-nam, proprietor of 24 Hr Locksmith; and Wu Ting, director-cum-shareholder of Elation International Limited.

The defendants were released on ICAC bail, pending their appearance at the Eastern Magistrates’ Courts tomorrow (June 28) for mention. The prosecution will apply for transferring the case to the District Court for plea.

In April 2020, HKMC Insurance Limited (HKMCI) launched the SLG under the SME Financing Guarantee Scheme to loans approved by lenders, which were fully guaranteed by the government, to ease SMEs’ cash flow pressure under COVID-19 pandemic.

At the material time, the maximum facility amount of the SLG was an SME’s total amount of wages paid to employees and rental payments for six months, or $4 million, whichever is the lower. Eligible SMEs must fulfil certain requirements, including having been in operation for at least three months in Hong Kong as at the end of 2019, and having suffered at least 30 per cent decline in sales turnover in any month since February 2020 compared with the monthly average of any quarter in 2019. An applicant was required to provide the relevant proof.

Standard Chartered Bank (Hong Kong) Limited (Standard Chartered Bank) was one of the participating lenders. After confirming an application received was legitimate, Standard Chartered Bank would forward the application to HKMCI for final review and approval to grant a guarantee.

Between April and September 2020, each of the six defendants allegedly conspired with other persons to defraud Standard Chartered Bank by dishonestly falsely representing that the documents submitted in relation to the sales turnovers and employees payrolls of their companies in support of the SLG applications were genuine and accurate; inducing and causing Standard Chartered Bank to approve six loans, each ranging from over $1 million to $4 million and totalling about $19 million, to the six SMEs.

The ICAC investigation arose from a corruption complaint. Enquiries revealed that the relevant proofs in relation to sales turnovers and employees payrolls of the SMEs were false, and some of the SMEs concerned defaulted on their loan repayments.

As the relevant corruption investigation is continuing, the ICAC does not rule out further law enforcement actions.

HKMCI and Standard Chartered Bank have rendered full assistance to the ICAC during its investigation into the cases.

The ICAC has been arranging integrity training and providing corruption prevention resources for different industries. Business operators are reminded not to commit bribery or engage in illegal activities. For more information, please visit the webpage of "SMEs and Start-ups" under Hong Kong Business Ethics Development Centre.
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