Article

Note: Value-Net, a company of which Cheng Yuk-kuen was a director, desired to purchase goods from a Taiwanese company. It was unable, however, to obtain the necessary LCs. It was, however, able to obtain a LC payable to Golden Lily Investment Limited, of which Kwong Shing Cheong, Stephen, Defendant, was owner. Defendant was a close friend of Cheng.

At Cheng's request, and to assist in his friend's financial difficulties, Defendant made false representations to the Kwangtung Provincial Bank and prepared and submitted false invoices and cargo receipts to the Bank. The total value of the LCs was HK$ 7.8 million. Defendant returned the proceeds to Value-Net, which purchased the goods, resold them, and repaid the LCs. There was, therefore, no loss to the bank and Defendant received no personal gain.

Defendant was charged with conspiracy to defraud. At trial, Defendant admitted that he was fully aware that there was never any genuine transaction. He said he was only trying to help Cheng to tide over his financial difficulties and he had not derived any benefit. He was sentenced to a 2-year prison term. The issuing bank was made whole by a settlement from Applicant's company.

Defendant sought leave to appeal the sentence on the grounds that he offered the court information about his co-conspirator, Cheng, and was willing to testify against Cheng. On appeal, the High Court of the Hong Kong Special Administrative Region, Yeung, JA, refused the application, stating that although Defendant had promised to testify against Cheng, he had not, in fact, done so. The appellate court stated that a defendant should be given credit for what he has actually done, and not for what he has promised. The court stressed that in view of the seriousness of LC law violations in general, the sentence of two years given to Defendant was "actually very lenient rather than manifestly excessive."

[JEB/ees]

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