It may have taken members of a syndicate several years and the complicity of a former bank official to arrange false letters of credit (L/Cs) to fraudulently obtain more than HK$2 billion from the Bank of China Hong Kong (BOCHK) in one of the latest scams under investigation by Hong Kong's Independent Commission Against Corruption (ICAC).

Investigators arrested 20 people in connection with the matter at the beginning of May. The investigation follows claims that the syndicate and others worked with the former BOCHK manager who issued false L/Cs.

Familiar ploy

The syndicate reportedly used a familiar ploy, fabricating sales and purchase records and trading documents related to a companies set up by around a dozen of the fraudsters.

The ICAC has released on bail those it arrested, including Shanghai Merchants Holdings chairperson Sandy Mo. She is the wife of Shanghai property tycoon Chau Ching-ngai whose activities are also under investigation by the authorities in mainland China. Bail for Mo was set at HK$10 million and for the others at between HK$100,000 and HK$500,000.

Document trail

Investigators are apparently studying thousands of documents seized from the premises of several companies and they have conducted a search of Chau and Mo's Hong Kong home.

The ICAC is also believed to be checking the details of loans that might be worth billions of Hong Kong dollars made by BOC to Shanghai Merchants and Shanghai Land, of which Chau is chairman.

Investigations

No charges have yet been brought by the ICAC in this case although a spokesperson for Hong Kong's anti-corruption unit is on record saying that investigations into the matter are ongoing.

One of Chau's businesses on mainland is also understood to be subject of a separate investigation by the Shanghai municipal government. It is apparently investigating the tycoon's Nong Kai Group for transaction irregularities. Investigations are believed to be ongoing in this matter too.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.