Note: Three former officers (Officers) of Wing Fai Construction Company (Company) were sued for misfeasance by Company's liquidators after Officers allegedly defrauded Company of HK $32,692,747.12 "through a series of fake or sham letters of credit transactions, for goods that were never delivered". The opinion stated that:

The transactions took the form of supposed deliveries of asphalt, concrete mix and steel bars to [Company] by [shell companies]. The [Company's] liquidators have obtained copies of numerous cheques and letters of credit documents signed by [Officers]. They alleged that [shell companies] were set up either at the direction or with the knowledge of some or all of the [Officers] for the purpose of obtaining funds from [Company] through letters of credit to channel monies to other entities in [Company's] group. As a result, [Company] had been drained of substantial funds in the three months leading up to its sale and the six months leading up to the appointment of provisional liquidators, that would have otherwise been available to meet at least partially the debts of creditors.

Officers applied to strike out and dismiss the misfeasance claims, but the Court of First Instance, Chu, J., dismissed Officers' application and ordered them to pay Company's legal costs associated with the application.



The views expressed in this Case Summary are those of the Institute of International Banking Law and Practice and not necessarily those of ICC or the other partners in DC-PRO.