A Hong Kong court has issued a warrant for the arrest of a director of a mainland Chinese window company director after he failed to appear in court to face charges related to an alleged HK$102 million (US$13 million) letter of credit fraud.

The court also ordered the forfeiture of HK$200,000 cash bail paid by Li Yu-cheng, a director of Ultragrace Limited, a window company based in Sanshui City, Guangdong Province.

False documents

Li is facing three charges of conspiracy to defraud the Bank of China, the Bank of Communications, the Kwangtung Provincial Bank and the Kincheng Banking Corporation between June 1997 and October 1998 by using false documents to apply for a total of 21 L/Cs from the banks.

According to a statement issued by the Independent Commission Against Corruption (ICAC) it is alleged that the documents purportedly showed business transactions between Ultragrace, Commercial Power Investment Limited, Keep Mount Limited and C&W Development Limited. The banks subsequently released credit facilities totalling HK$102 million to the companies.

Two others facing charges related to the same alleged frauds, Yu Wai-tung, financial controller of Ultragrace, and Chan Tsz-leung, director of C&W Development made appearances in court in mid-March, but have had their cases adjourned to 20 April 2001.

Government official on the run

Three other men allegedly involved the frauds have already absconded, including another director of Ultragrace, Li Runquan, and his son Lai Yu-hong, a director of Commercial Power. They face a total of five conspiracy charges, but failed to appear in court earlier this year.

Li Runquan is a member of a committee of the Sanshui City government in Guangdong.

A third man and another director of Commercial Power, Chan Wai-lam, failed to report to ICAC investigators last October. The ICAC has asked for information that may lead to the arrest of any of the four missing men.