A former Hang Seng Bank employee, Lam Tze-leung, has been jailed for seven years and nine months for fraudulently granting letters of credit (L/Cs) worth more than HK$490 million.

Lam, a former senior credit manager at the bank, was found guilty by a Hong Kong court of five counts of accepting an advantage as an agent and four of conspiracy to defraud.

Bribes

The court heard that between May 1994 and February 1996, Lam accepted a Rolex watch and bribes of HK$100,000 and Can$10,000 from Ho Siu-hoi, and a pair of Rolex watches from Ho's father, Ho Chi-chun.

They were both shareholders and directors of Au Kiang International and Dero Enterprises.

Credit facilities

The bribes rewarded Lam for facilitating the granting and maintaining of credit facilities from the bank to the firms.

Between June 1995 and January 1998, the court heard that Lam conspired with others to defraud the bank by causing Au Kiang or Dero to apply for and utilise credit facilities from the bank.

No commercial transactions

This was achieved through the production of 136 L/Cs, all of which were secured on the basis of false documents submitted to the bank.

The documents appeared to support the credit applications by purportedly showing underlying commercial transactions between Au Kiang, Dero, Star Regent International and Pure Guard Industrial.

As a result, the bank released over HK$490 million to Star Regent and Pure Guard. Ho controlled all of these entities.

Abused position

Lam left Hong Kong in August 1998 shortly before the former British colony's Independent Commission Against Corruption launched an investigation into the frauds. An arrest warrant was subsequently issued and a request was made for Lam's arrest in Canada.

The judge presiding over the case reprimanded Lam for abusing his senior position at Hang Seng Bank.

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