Former aviation chief denies insider tradingTop News | Staff reporter 27 Jan 2012
Former civil aviation chief Albert Lam Kwong-yu pleaded not guilty to insider trading yesterday over a trade in which he made HK$79,000.
Eastern Magistrates' Court heard that the trade - which involved the purchase of 4,000 Hong Kong Aircraft Engineering Company and their quick resale - was made when Lam was a non-executive director of the company.
HAECO chief executive Augustus Tang Kin-wing told the court he phoned Lam on June 4, 2010, to inform him that Swire Pacific planned to acquire 15 percent of the company's stock in a few days. Later, Lam phoned Tang back to say he had "mistakenly" purchased HAECO stocks at HK$84 each in the morning - before Tang informed him of Swire Pacific's planned share acquisition.
Lam allegedly said he did not know directors were not supposed to buy HAECO shares once Swire Pacific's intentions were clear. He also allegedly admitted not informing the board chairman of his purchase.
Lam is said to have told Tang he knew the purchase was against HAECO's internal policy and was willing to receive any punishment, including resigning from the company. Tang said Lam, under exhaustive questioning, admitted he bought the shares after being informed of Swire Pacific's impending share acquisition.
Tang told deputy magistrate John Glass that Lam promised on June 5 to donate all the profits to charity, which he did. Tang said he then reported the incident to a HAECO legal adviser, who said the share purchase should be the subject of a public announcement to be jointly issued by HAECO, Swire and Cathay Pacific.
Lam is being prosecuted by the Securities and Futures Commission.
He resigned from HAECO a day before Swire bought the stock on June 7, 2010. Trading in HAECO shares was suspended on the day of the purchase and resumed the next day, closing at HK$104.20 - around 25 percent higher than the closing price during the last trading day. Swire bought the shares from Cathay at HK$105 apiece, increasing its stake to 60 percent.
Lam, 66, joined the Civil Aviation Department as an air traffic control assistant when he was just 18. He became the airport's general manager in 1994 and deputy director-general of civil aviation in 1996. Two years later he became director and retired in 2004.