On 6 March A Hong Kong court sentenced the owner of a trading company for his part in the US$9.3 million Guangnan (Holdings) Limited credit fraud to four years imprisonment. The fraud has been the subject of several past stories in DC-PRO Focus.

Zhao Shan-ning, owner of Tak Ming Trading Company had earlier pleaded guilty to five conspiracy charges concerning applications for letters of credit (L/Cs) supported by false documents.

Charges brought by the Independent Commission Against Corruption (ICAC) alleged that that Zhao had conspired with his wife Chow Kit-ming, Guangnan director Huang Bing-tong and others to defraud Asia Commercial Bank Limited and The Bank of Nova Scotia between 1 January and 30 November 1998. The Justice Department withdrew charges brought by the ICAC against Chow Kit-ming.

Zhao was alleged to have dishonestly caused Guangnan and New Anrong Company Limited (New Anrong), a subsidiary of Guangnan, to apply for and utilise credit facilities from the banks under five L/Cs by submitting false documents to the banks.

The bogus documents purportedly showed that Tak Ming had carried out genuine underlying commercial transactions with Guangnan and New Anrong, trading in air conditioners, cold rolled steel sheets and packing materials for canned food.

The banks subsequently released credit facilities totalling about US$9.3 million to Tak Ming.

The court heard that to cover the scam, Zhao, on receipt of payments from the banks, re-routed the proceeds to Guangnan's bank accounts via Huang's personal accounts. Zhao received about US$8,211 as a reward for his role.

The total value of L/Cs utilised in the Guangnan frauds amounts to approximately HK$1.6 billion according to the ICAC. So far 27 people, including Zhao, have been charged but twenty-two people are still wanted by the ICAC for their alleged involvement in the scams.