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Note: For almost two years, Bowick Industries Limited applied for 11 LCs totaling over HK$7.5 million (US$968,000) which were issued by Hang Seng Bank in favor of Delta Industrial Company Limited. Although there were no transactions between the two companies, Defendant, Chan Nai Tak, who was a director and shareholder of Beneficiary, signed or co-signed the invoices, collection orders, sight drafts, and checks purported to describe the sale of clock movements related to the LCs which were presented and honored. Afterwards, most of the proceeds were returned to Applicant.

Charged with 11 counts of conspiracy to defraud, Defendant was convicted in District Court, and sentenced by Smout, DJ., to 19 months imprisonment.

Defendant applied for leave to appeal the conviction chiefly on the grounds that he was unaware of the fraudulent nature of the LCs, and played a minor role at Delta, tantamount to that of an employee. The High Court of the Hong Kong Special Administrative Region Court of Appeal, Ma, CJHC, dismissed the application. The appellate court cited testimony from the trial court record showing evidence that Defendant must have known about the fraudulent nature of the LCs. The appellate court further noted that Defendant was not a mere employee, but a shareholder and director of Beneficiary, Delta.

[JEB/ees]

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