Far East boss acquitted of $61m fraud

Local | Candy Chan 9 May 2012

Former Far East Holdings International managing director Duncan Chiu and two senior staff have been acquitted of fraud and theft charges.

Chiu, 37, had faced three counts each of theft and illegal lending, which carry a maximum jail term of seven years.

Chief financial officer Lui Hung- kwong and the chairman's personal assistant, Yung Kim-bing, both 51, were charged with three counts of theft and breaching the Companies Ordinance.

The three were alleged to have stolen a total of HK$61 million on three separate occasions between March and September 2007.

District Court judge Frankie Yiu Fun- che said while actions of the three appeared suspicions, he could not be sure from the evidence that they committed the offenses.

But he said the case highlights how easily a family- controlled and publicly listed company can be manipulated without minority shareholders being aware of it.

He said the matter should be referred to the Securities and Futures Commission or other appropriate authorities for further action or sanction.

The judge added that the activities carried out by the company in relation to the transfer of the money clearly reflected its poor or sloppy governance.

The HK$61 million was borrowed by Far East from Hang Seng Bank and HSBC Private Bank (Suisse).

The trio were accused of approving during the same period three loans totaling HK$61 million from Far East Holdings to Chui's father and company chairman - Deacon Chiu Te-Ken.

The money was used to buy new company shares, the court heard.

Firms cannot lend to their directors, according to the Companies Ordinance.

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