Hong Kong's Independent Commission Against Corruption (ICAC) ended 2001 by securing yet more convictions against perpetrators of frauds involving letters of credit (L/Cs). The District Court on 27 December found two company directors guilty of conspiring to cheat bank credit facilities totalling HK$10.5 million with bogus business transactions.

Tam Kei-kwong, a shareholder and director of Pure Guard Industrial Limited and Dragon Marine Services Ltd., and Leung Chi-por, a shareholder and director of Pure Guard, were found guilty on a total of 17 charges of conspiracy to defraud. The judge adjourned sentencing to 10 January 2002.

False documents

The charges stated that the defendants had conspired with Lee Tsang-kong, Lam Shuk-yi and others to defraud Hua Chiao Commercial Bank Limited by dishonestly causing Dragon Marine to apply and utilise credit facilities from the bank in the form of 17 L/Cs in total. Lee was another shareholder of Dragon Marine, while Lam was a company manager. They were also accused of submitting to the bank false documents that purportedly evidenced genuine underlying commercial transactions between Dragon Marine and Pure Guard and of causing the bank to issue a total of HK$10.515 million to Pure Guard under such L/Cs.

The court also heard that after deducting HK$17,000 as "handling charge", Pure Guard remitted the remaining sums to Dragon Marine. The case came to light during the course of an ICAC investigation into alleged credit fraud and corruption involving bank officers.

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