More top executives and senior business people are being brought to book in corruption cases because of the efforts of Hong Kong's graftbuster, the Independent Commission Against Corruption (ICAC).

The ICAC has unearthed several significant letter of credit (L/C) frauds in spurious trading contexts over the years. More recently it has reported an increasing number of cases where L/Cs have been employed in scams to inflate company values on the Hong Kong stock exchange.

Senior fraud

Senior executives are increasingly at the centre of some of Hong Kong's ever more sophisticated commercial scams according to ICAC statistics.

They show that 73 per cent of those prosecuted in commercial corruption cases in 2004 were senior executives and business professionals, up from 69 per cent in 2003 and 52 per cent in 2002.

International reputation

"Many commercial cases are related to listed companies and their senior executives,'' programme co-ordinator at the ICAC, Helen Lee, told a Hong Kong based business daily.

"This could affect Hong Kong's reputation as an international financial centre and the ICAC is obviously very concerned,'' she added in an interview with The Standard.

Inflated shares

Bank officials have featured in several L/C frauds prosecuted by the ICAC but the commission identifies accountants as key players in scams involving initial public offerings (IPOs).

Some companies offered benefits to accountants who manipulated figures before IPOs and these professionals might continue to be bribed once a company is listed to falsely inflate a share price according to Lee.

She is particularly concerned about the recent trend of using L/Cs representing business transactions that never took place to secure bank loans and to spike share prices.

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