A senior executive of a listed company subsidiary and two directors of two construction companies are amongst four people charged by Hong Kong's Independent Commission Against Corruption (ICAC) for their alleged roles in a 75.3 million Hong Kong dollars (HK$75.3 million - US$9.7 million) letter of credit (L/C) fraud involving over HK$1.7 million in bribes and money laundering.

The defendants are Wang Xiaoshan, deputy general manager of China Railway Construction, a subsidiary of publicly listed China Railway Construction Corporation; Lau Hing-lung, director of now defunct King Tai Construction (KTC) and chief administrative officer of now defunct Top Famous Construction Engineering (TFCE); Lo Pui-yu, director of TFCE and Chan Ka-ho, son in law of Lo and director of Azure Industrial (AI). They face a total of 16 charges.

Accepting advantages

Wang, Lau and Lo face a joint charge of conspiracy to defraud, while Wang and Lo face two further joint charges of conspiracy for an agent to accept advantages.

Lau also faces one count of dealing with property known or believed to have been funded by the proceeds of fraud. Lo further faces 12 similar offences, one of which was jointly charged with Chan.

L/C fraud

The conspiracy to defraud charge alleges that between the June 2016 and March 2017, Wang, Lau and Lo conspired together and with other persons to defraud DBS Bank and cause it to make payments totalling over HK$75.3 million to KTC.

The charge alleges that those three defendants dishonestly applied to DBS Bank to issue three L/Cs in favour of KTC, knowing that there was no genuine underlying transaction for those L/Cs.

Further charges

The defendants are also alleged to have produced false documentation, including invoices, packing lists and cargo receipts, to support the applications.

The ICAC further alleges that Lau, Lo and Chan dealt with over HK$75.3 million in various bank accounts of KTCL, AI and other companies controlled by Lo.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.