A Hong Kong court has sentenced a company director to 18 months imprisonment for defrauding a bank of HK$6 million in letter of credit (L/C) facilities using bogus documentation that apparently showed genuine commercial transactions.

Three other people charged in the same case have absconded.

Conspiracy

Chan Tung-yeung, a director of Ford Mart Limited, pleaded guilty to one count of conspiracy to defraud the Kwangtung Provincial Bank. The court ordered that a second charge of conspiracy to defraud against him should be left on court file.

The court heard that between October 1997 and December 1998, Chan had conspired with other persons to defraud the Kwangtung Provincial Bank (KPB) over three L/C applications.

False documents

The conspirators submitted false documents to the bank. These bogus documents apparently evidenced a series of genuine underlying commercial transactions between Ford Mart and Uni-Art Precise Products Limited. As a result, KPB released about HK$6.4 million to Ford Mart under the L/Cs.

The court also heard that Ford Mart reverted the proceeds to Uni-Art after deducting 0.3 per cent as a so called handling fee. Uni-Art subsequently repaid the loans to the bank.

No show

The three people charged in the same case who failed to show in court are Lai Kam-yau, director of Creative Worth Development Limited, Regent Delta Limited and South China Electronics Company Limited; Chan Cheng, a director of Regent and South China; and Law Ming, a director of South China.

The trio were scheduled to appear in a Hong Kong court in July this year on two joint charges of conspiracy to defraud, but failed to turn up. The court issued warrants for their arrests.

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