Note: Between 3 September 2001 and 19 January 2002, Wing Fai Construction Company Ltd. (Applicant) applied to banks for 11 LCs to be issued in favor of Famous Capital Enterprises Ltd (Famous) or King Capital Engineering Ltd (King) for the purported sales and purchases of products when none of the underlying transactions in fact existed. Applicant's director (First Defendant) signed all application documents. The directors and shareholders of Famous (Second Defendant and Third Defendant), one of whom was

Applicant's account clerk, signed supporting documents for Famous, while the director and shareholder of King (Fourth Defendant) signed documents for King. Four banks issued LCs totaling HKD 31 million. Some of the proceeds were deposited into Famous' bank account and subsequently accessed by Second and Third Defendants between 12 September 2001 and 1 February 2002. Other proceeds were deposited into King's bank account, which were later paid to another company.

Applicant was later sold to another company and a winding up petition was ordered. On 28 February 2003, liquidators were appointed. Following investigations, the liquidators reported to the Commercial Crime Bureau (CCB) about the LCs. All defendants were then charged with fraud and money laundering.

Defendants filed a stay application claiming the liquidators used the criminal proceedings to pressure them into a global settlement of the civil proceedings and that there was unjustifiably delay. Unbeknownst to the prosecution and the defense, Mr. Shiu, a supervising counsel of the CCB, had directed his secretary Ms. Nip to download various documents from the Department of Justice (DOJ) document management system onto his two thumb drives and delete those documents from the system on 25 May 2012 before he gave evidence on first stay application. The DOJ reported the matter to the police, who searched Mr. Shiu and Ms. Nip's offices and seized the thumb drives. Defendants claimed that no fair trial was possible under those circumstances, and even if a fair trial was possible, such incident had prejudiced the integrity of the criminal proceedings. The Judge denied Defendants' fair trial claim, finding that none of the restored documents were relevant to the present case and that Ms. Denise Chan, another counsel in the CBC, was the key person who recommended the prosecution.

Defendants filed a re-opened stay application on 8 October 2012. The Court of First Instance, Poon, J., dismissed the re-opened stay application, finding there was no abuse of process when Ms. Chan made the decision to prosecute independently, without being influenced by any of the parties. The Judge applied the principle that a judge has discretion in determining whether there has been an abuse of process amounting to an affront to the public conscience which would require a stay of criminal proceedings.



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.