The former chairman of a Hong Kong listed public company has been sentenced by a court in the former British colony to an additional 27 months' imprisonment for his role in defrauding banks of HK$57 million in letters of credit (L/C) facilities based on bogus business transactions.

Wong Chor-wo, who was chairman of Wealthmark International (Holdings) Limited had already been charged by Hong Kong's Independent Commission Against Corruption and pleaded guilty to three counts of conspiracy to defraud.

Longer terms

The judge sentenced Chor-wo to 44 months' imprisonment, but ordered 27 months be added on to his current six-year jail term for submitting false statements to auditors and for covering up the misappropriation of company funds in another trial.

Wong Chun-ping now has to serve an extra 20 months over and above his current three-year jail term for dealing with these misappropriated funds. A director and shareholder of CK Trading Company Limited, he had already been jailed for 32 months.

Another defendant, Chung Ching-huy, a sole proprietor of Belle Sac Company has received a jail term of 27 months for his part in the frauds.

Collusion

The court heard that Wong Chor-wo was a director of Wallmark Enterprise Company Limited, a subsidiary of Wealthmark, which manufactured and sold handbags and related products.

Between 1998 and 2001, Chor-wo conspired with Chung-huy to apply to banks for ten L/Cs amounting to HK$17,750,658 from banks in favour of Belle Sac. The applications were based on bogus transactions between Wallmark and Belle Sac. Once it received the L/C proceeds, Belle Sac channelled these funds to Wallmark.

More bogus transactions

The court also heard that between 1998 and 2001, Chor-wo conspired with Wong Chun-ping to apply to banks for ten L/Cs amounting to HK$21,603,610 in favour of CK Trading.

Additionally, between 2001 and 2004, Chor-wo and Chung applied for nine L/Cs totalling HK$19,755,765 from various banks, all based on bogus business transactions between Wallmark and CK Trading.

Once CK Trading received the L/C proceeds, these were channelled to Wallmark either directly or through Chung-ping's personal bank accounts.

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