Another person has been convicted for her part in the multi-million dollar Guangnan (Holdings) Limited credit fraud. A total of 27 people have now been charged in relation to several alleged letters of credit (L/C) frauds worth some US$1.8 billion in total.

Cheung King, a 32 year-old director of Long Spark (HK) Development Limited pleaded guilty in early April to one count of conspiracy. She is the ninth person to be convicted by courts in Hong Kong. Others convicted have been sentenced to prison terms ranging from two years to six years.

Ex-Guanguan employees

Cheung admitted conspiring with Cai Chun-sheng, Lo Sioe-chien and others to defraud Société Generale in 1998 by dishonestly:

- causing Guangnan to apply for and utilise L/Cs from Société Generale;

- submitting to the bank false documents, purportedly showing evidence of genuine commercial transactions between Guangnan and Long Spark, and

- causing the bank to release US$891,000 in total to Long Spark under the said L/Cs.

Lo Sioe-chien and Cai Chun-sheng were respectively financial manager and director of wholly owned Guangnan subsidiary Join Wing Limited. The defendant, before she become a director of Long Spark was employed by Join Wing.

Bank accepted forged document

The defendant agreed to Cai's request that she help fabricate a document showing a business transaction worth US$891,000 between Long Spark and Join Wing via Guangnan. This was the false document that persuaded Société Generale to release to Long Spark, credit facilities of US$891,000. Guangnan was named as the applicant on the L/C. Société Generale subsequently released to Long Spark a total of US$891,000 in credit facilities, which the defendant subsequently remitted to Join Wing.

Warrants have now been issued for the arrest of 23 people who have either skipped bail or left Hong Kong during the course of investigations into alleged fraud and bribery cases involving Guangnan.

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