Adrian Foo, formerly of ING Investment Management Asia Pacific (HK), was charged with accepting monetary rewards for purchasing shares of garment manufacturers Kwong Hing International Holdings (Bermuda) and LeRoi Holdings.

Other issues, including a fight over prosecution evidence and conspiracy charges, loom in a complex legal battle to untangle a scam that prosecutors say resulted in the purchase of 18.8 million Kwong Hing shares using ING funds.

Louis Lin, a former director of investment company SBI E2 Capital China Holdings, also pleaded guilty to brokering the deal between Foo and a former director of Kwong Hing, Li Man-tak.

Lin and Foo were convicted by District Court Judge Fergal Sweeney. Their application for bail was denied and they are being held in custody awaiting sentencing.

Lin, Li and another former director of SBI E2, Vincent Yum, were arrested February 25 last year outside the car park at the Central Star Ferry terminal.

A total of HK$594,500 was recovered from Yum on the scene, and a note confirming four other bribe payments totalling HK$2.39 million was discovered on Lin.

The net amount of bribe payments exchanged is believed to far exceed that amount.

Yum, who cooperated with the ICAC, was not charged. As a prosecution witness, he will give evidence subject to immunity prepared by the Department of Justice.

Li has pleaded not guilty to bribing Lin, Foo and Yum to buy shares in his company. His counsel, Cheng Huan, SC, applied to disqualify surveillance footage - including photographs and video and voice recordings - from trial proceedings.

Judge Sweeney will have to rule on the disputed evidence before the trial can proceed.

Video footage of an interview in which Li effectively admitted offering financial rewards to other agents immediately after his arrest was shown before the court Wednesday.

Cheng is expected to argue that Li was forced to confess under duress.

Li, Lin, Foo and a former executive director of UBS Securities Asia, Nicholas Tan, also face charges of conspiring to unlawfully promote Kwong Hing shares to UBS customers.

Despite objections from the defense team, government counsel David Fitzpatrick was allowed to add two sub-charges in order to distinguish the separate conspiracies involving the former director of UBS.

There were two distinct phases, Fitzpatrick said. First, Tan was asked to promote Kwong Hing shares to customers at a UBS conference and in a UBS publication. UBS is an extremely well-regarded bank, Fitzpatrick said, and it was believed this would be sufficient to increase the sale of shares.

However, when this failed to have the desired effect, the four accused allegedly hatched another plot for Tan to draw up a favorable by-report which overestimated the value of Kwong Hing shares.

Lin pleaded guilty to promoting Kwong Hing at conferences and giving it favorable mentions but denied helping to draw up the fraudulent report. Li, Foo and Tan deny any conspiracy to unlawfully promote Kwong Hing shares.

The first day of the trial, expected to last 20 days, was a stop-start affair as both the prosecution and defense counsels exchanged barbs.

Representing Tan, Gary Palmer suggested that Fitzpatrick was trying to gain unfair advantage by amending his charges without providing supplementary details to the defense.

``Fundamentally, the defendant has the right to know the charges he is expected to meet,'' said Palmer. ``[In this event] we are clearly prejudiced.''

Fitzpatrick countered that further explanations were not necessary because he was not adding any new evidence, merely clarifying the charges.

Defense counsel Cheng also refused to disclose the reasons for his objection to the surveillance footage until later in the trial.

Last February, Kwong Hing International was given an eight-month trading suspension as a result of the ICAC investigation. On its first day after the suspension, it lost over half its market value. All its bankers, except for HSBC, were unwilling to lend to the company.

While at ING, Foo was responsible for managing the ING Developed Asia Pacific Fund, ING Zuid Oost Azie Fund, EM144, ING (L) Invest Greater China, ING (L) Asian Growth and ING (L) Invest Hong Kong fund.

The respective companies have not been implicated in any of the alleged offenses.

The second half of the video footage, involving Li, will be shown this morning. staff.reporter@singtaonewscorp.com