The 1st and the 2nd accused was each convicted unanimously by the jury after trial of two counts of conspiracy to defraud (Count 1 and 2), while the 3rd accused was convicted by a majority verdict of the same two counts. In addition, the 1st accused was convicted of one count of money laundering (Count 3).
Count 1 in this case is a conspiracy to defraud the Stock Exchange of Hong Kong. Count 2 is a conspiracy to defraud 462 and its existing shareholders. Finally, Count 3, the money laundering charge, involved a total sum of HK$85 million.
Briefly, the matters which were not disputed at trial included these.
In late 2008, the 1st accused, the 2nd accused and a person called Barry Fraser, signed a commission sharing agreement in respect of the sale of the CraFarms in New Zealand.
In April 2009, the then Chairman of 462, PW1, was approached by the 1st accused during which the acquisition of the CraFarms was raised. PW1 described 462 as a “rubbish company” (or words to that effect) at the time, and she was eager to find new projects for 462.
After PW1 had shown interest in the farm acquisition, the 1st accused later introduced the 2nd accused to PW1. According to PW1, the 2nd accused was said to be the farm owner; although, in fact, she was not so at the material time.
After the meeting, the 2nd accused did not respond to PW1. PW1 turned to the 1st accused for assistance. As a result, the 1st accused was appointed as the co-chairman and director of 462 in early May 2009. Thereafter, the negotiation between 462 and the 2nd accused went smoothly.
Eventually, 462’s board of directors approved the acquisition of the farms at the price of NZ$500 million. In this connection, an announcement and a circular were later issued on the stock exchange website. Contained in both the announcement and the circular were statements to the effect that the 1st and the 2nd accused were independent parties in respect of the acquisition. Also contained in the circular was an appendix listing out the financial information of the target assets.
After the approval of the acquisition by 462’s shareholders and in order to raise funds for the purchase of the farms, convertible notes and optional bonds were issued, and money started coming into 462.
In the meantime, and before the deal was completed, there were quite a lot of twists and turns, including these: the injection of the farms into the 2nd accused’s company was changed from a condition precedent to a condition subsequent; money raised for the acquisition was sent to New Zealand to be held in escrow, yet out of the money raised; a sum of NZ$51.6 million of the CNC money was transferred from the escrow account to the 2nd accused’s company account; there was the conversion of the convertible notes into shares; the CraFarms going into receivership; the receipts by the stock exchange of complaints that the 1st and the 2nd accused were working on the acquisition together and that the accounts of the assets provided to 462 were false; as well as the refusal of the New Zealand OIO to give approval for the purchase of the CraFarms.
In essence, the prosecution’s case was that the 1st and the 2nd accused were, indeed, working together in the acquisition for their own dishonest gains, and that they had concealed from 462 and the Stock Exchange of such working relationship and had concealed the existence of the commission sharing agreement.
In addition, it was said that the 1st, 2nd and the 3rd accused had conspired together to conceal the true financial information of the CraFarm assets, and had provided false accounts in this respect.
Next, I would like to outline briefly the role of the respective accused in these conspiracies.
The 1st and the 2nd accused’s role, on any view taken of the evidence adduced by the prosecution, must have been that of the prime movers. For instance, the 1st accused was the one who approached PW1 in the first place. He was also the one who was active, and who succeeded, in introducing or getting quite a number of investors for the acquisition. Further, it was not disputed that even after his resignation from 462, the 1st accused was the one who asked PW1 to cease occupying the position of 462’s chairman and finding PW3 to replace her.
Pausing here, I should mention that it was the prosecution’s case that the 1st accused originally expected PW3 to be his man, but it turned out that PW3 did not go along and PW3 asked to take leave after a row over the conversion matter.
Overall, given the 1st accused’s conduct throughout the periodconcerned, it is appropriate to describe him as the mastermind of the conspiracies. He was there from the beginning till the very end overseeing how things developed and arranging for actions to be taken in order to have their criminal plan coming into fruition.
I also cannot lose sight of the fact that on the jury’s verdict, the 1st accused had received the bulk, if not all, of the HK$85 million as his personal gain from the acquisition which money had come from the investors.
As for the 2nd accused, she too was a prime mover of the conspiracies. She was the one who asked Barry Fraser to sign the confidentiality agreement with the CraFarms, and she was the one who then signed the commission sharing agreement with the 1st accused and Barry Fraser. She was also the one who signed to purchase the CraFarms just a few days before 462’s acquisition.
At trial, it was not disputed that the 2nd accused was the one actively participating in the roadshow, no doubt intending to get as many investors as possible for the acquisition, and no doubt with the purpose that there would be money for them to pocket.
In addition, the financial information of the CraFarms assets was either provided to 462 by the 2nd accused direct, or by the 3rd accused who, it was again not disputed, was, on the face of things, the agent acting on the 2nd accused’s behalf.
Further, it was PW3’s evidence that other than the 1st accused, the 2nd accused had also approached him to join 462 as the chairman. Again, on any view of the evidence adduced, the 2nd accused was, together with the 1st accused, at the centre of the conspiracies and she played a pivotal role in carrying out their criminal plan.
Finally, for the 3rd accused, he was involved in the CraFarms accounts. Whether the jury convicted him because of the concealment of the true financial information, or on the basis of the provision of false accounts, or both, his role is, relatively speaking, not as major as that of the 1st and the 2nd accused. Not only did he come into the picture at a later stage, the degree of his involvement was also not as extensive as that of the 1st and the 2nd accused.
However, having said this, I have to point out that he was the front man dealing with the accounts, and he was the one handling the ShineWing people. He was also the one to whom ShineWing directed their queries on the accounts and from whom answers were provided.
Now, before I deal with the mitigation urged upon me by leading counsel and counsel for each accused, I should state at the outset that although I gave a Brown direction in my summing up, and that the jury might have convicted the accused upon just one, but not all, of the particulars being proved, the two categories of particulars, that is, those relating to the 1st and the 2nd accused’s relationship and those relating to the accounts are, in my view, equal in gravity.
At trial, it was not disputed that if it was a connected transaction, then there would be the appointment of an independent financial adviser to protect the interests of the minority shareholders. If such was the course taken, it would then be more difficult for false accounting information to be provided.
Equally, for the Stock Exchange, it was the unchallenged evidence of their officers that all the information contained in the announcement and circular published on the Stock Exchange website had to be true and accurate, for the public, the potential investors, had to rely on such to make their informed decisions. In other words, it matters not much whether it was the relationship between the 1st and the 2nd accused which was found by the jury to have been a false representation dishonestly made, or whether it was the accounting matter which was so found.
Hence, in this case, I do not consider that one category of false representations was more serious than the other category. The criminality involved is similar. Both were important matters to be truly and frankly disclosed to 462, as well as the Stock Exchange, and both had a significant impact on the decisions taken by 462 and the Stock Exchange.
Moreover, given that the 3rd accused was convicted, it must have been the case that the jury had at least found one of the particulars concerning the accounts proved, and also that at least one of the 1st or the 2nd accused, if not both, was a party to that particular. Once that was proved and given the jury’s verdict, it would not be open to suggest that the jury had not also found the 1st and the 2nd accused indeed had a working relationship in respect of the acquisition.
In short, insofar as the 1st and the 2nd accused are concerned, the Brown direction did not call into question upon what basis they should be sentenced. For even assuming, and I am prepared to do so, that the jury had not found all the particulars proved, the degree of criminality involved is not much different.
The 1st accused
I turn now to the mitigation advanced on behalf of the 1st accused, by Mr Fitzgerald, QC.
The 1st accused, although disciplined once by the Shanghai Stock Exchange or a similar institution, was previously of a clear record. He is now aged 48 and was born in the Mainland. He came from an impoverished background, leaving school to work in his early teens and joining the army at the age of 16. Afterwards, the 1st accused started his own business and climbed up the social ladder to become the owner of the Shenlong Group.
In 2003, the 1st accused moved to live in New Zealand. It was said that he then became a leading figure in the Chinese community there, and he founded the New Zealand Chinese Business Roundtable Council, which was reported to be the biggest Chinese Chambers of Commerce in New Zealand, having a membership of about 20,000.
In 2010, the 1st accused was appointed as a representative by the Prime Minister of Samoa, and in 2011 a similar appointment was made by the Polynesian Island of the Government of Niue. I have also been provided with quite a number of letters written by the Prime Minister of Samoa, the 1st accused’s family members, friends, associates, employees, as well as by Hong Kong District and Legislative Councillors. All spoke of his friendliness, good qualities and the contributions and donations he had made in Hong Kong, the Mainland, New Zealand and Samoa.
Now, when addressing this court, Mr Fitzgerald emphasised on the absence of aggravating features, like no widespread public impact, no forgery, no bribery, not a long period involved, etc. At the same time, emphasis was placed on the fact that there were real farms to be acquired and that there was no actual economic loss caused to anybody.
The 1st accused’s conduct of the case and cooperation with the prosecution was also prayed in aid of the mitigation. On the other hand, Mr Fitzgerald accepted that the suspension of the trading of 462’s shares must have an impact on the shareholders.
The 2nd accused
The 2nd accused is aged 53, and she also came from the Mainland. Mr Harris, SC, when mitigating on the 2nd accused’s behalf, told the court that she had worked as a journalist in Shanghai. Having been refused by the Chinese Government to go to pursue media studies in the Netherlands, she successfully applied to study English in New Zealand. As a result, the 2nd accused arrived there in 1988 at the age of 26.
Between 1992 and 1998, the 2nd accused stayed and worked in Japan. Later in 2001, she returned to New Zealand and was granted full New Zealand citizenship. She was then involved in the real estate business and was highly spoken of by those working with her. In 2004, the 2nd accused set up her own company, engaging in property development. Later in 2006, her Dynasty Group was established, which was a success. However, in the 2008 financial crisis, the Dynasty Group was affected and went into liquidation. The 2nd accused herself was adjudged bankrupt in December 2010.
Further, it was said that since the 2nd accused’s assets have been seized by the New Zealand Official Assignee, all the benefits that she got from this deal has now gone.
In the course of submissions, Mr Harris emphasised that given the acquisition’s huge potential for success and for profit and that only the means used were found to have been dishonest, the present case should be distinguished from one which had no real assets to offer and that the only purpose was to deceive others.
As to the 2nd accused’s previous convictions of failing to attend examination in relation to the liquidation proceedings and the driving offence, Mr Harris asked this court to put those to one side as the latter offence was a minor one, and the offence of failing to attend examination resulted from miscommunication rather than any deliberate attempt to avoid the examination. Mr Harris submitted, the fact that the 2nd accused was only given a fine for the examination offence, must have been because the authority had accepted the explanation given by her when she later attended the examination.
Finally, it was said that as evident from a letter submitted to the court, the 2nd accused had offered generous donations and assistance to a Buddhist Temple in New Zealand and had made provisions for an abandoned baby girl whom she had originally planned to adopt.
The 3rd accused
The 3rd accused was born in Singapore and is now aged 44. He went to the University in New Zealand and later settled down there. After working in various financial institutions, the 3rd accused set up his own business as a loan adviser. He was divorced in 2010 and he originally planned to marry his Mainland girlfriend. Unfortunately, the girlfriend suffered a miscarriage in 2014.
At the age of 18, the 3rd accused was convicted of several sexual offences. He was put on probation and the conviction was ordered not to be recorded. In the circumstances, Mr Khosa asked that the conviction be put to one side and that the 3rd accused be treated as a first-time offender.
In mitigation, it was said that the 3rd accused’s role was confined to the accounting matter and that he merely followed his instructions in preparing those accounts, as well as in dealing with the ShineWing people. Further, it was submitted that the accounts were not entirely fictitious accounts but had used the CraFarms accounts as the basis with explanations about his workings given to ShineWing.
Mr Khosa emphasised that the accounts did not provide the main trigger for the acquisition and formed just one aspect of the transaction.
On a separate point, it was urged upon this court that a lenient sentence be passed as there was no actual loss caused to anybody and that the 3rd accused himself had made no personal gain. Further, the fact that the 3rd accused is a stranger in Hong Kong and that he has already suffered a lot in the past five years was prayed in aid of his mitigation.
In addition, I have been given letters written by 462’s chairman, the 3rd accused’s parents and the 3rd accused himself.
Sentencing considerations
For the offence of conspiracy to defraud, section 159C(6) of the Crimes Ordinance, Cap 200, stipulates that any person convicted of this offence shall be liable to imprisonment for 14 years.
Certainly, no two cases are the same, and it is not of much assistance to rely on the sentences passed in the other cases for each case has to be sentenced and decided on its own factual matrix, including the manner in which the offence was committed and the relevant personal circumstances of the accused urged upon the court in mitigation.
Recently, in the case of SJ v Lo King Fat & Ors [2016] 2 HKC 230, the Court of Appeal was asked to review the sentences passed on the three respondents in respect of the offences of conspiracy to defraud and bribery. After reviewing the case, the court adopted a starting point of 7 years for the conspiracy offence in respect of the 1st respondent, and a starting point of 8 years in respect of the 2nd respondent.
In the course of review, cases including AG v Dominic Cheung Kai Man [1987] HKLR 788; HKSAR v Fu Chu Kan & Ors CACC 104/2007, 27 July 2009 (unreported); and HKSAR v Chu Chi Kei & Anor [2013] 5 HKC 21, were examined and factors said to have made frauds of the worst kind were identified, namely: a breach of trust; in the multi-million dollar range; by a person in a senior and responsible position; and with an element of public impact. In addition, the period of the conspiracy and the scale of the scheme were also identified as aggravating factors.
I have also considered the case of HKSAR v Cheng Kelly Kit Yin [2014] 4 HKLRD 34, in which the Court of Appeal stated that:
“The absence of any realistic risk of loss to the victim is clearly a factor for the purposes of sentence but that it is a factor to be taken into account as part of the whole factual matrix.”
In the present case, although leading counsel and counsel for each accused emphasised the lack of evidenceconcerning any actual economic loss, as pointed out in the Cheng case, that is just one of the factors to be considered.
Here, it was not disputed at the trial that out of the money raised for the acquisition, about NZ$10 million was used to purchase two New Zealandproperties which were then put under the name of the 1st accused’s company, and that at least another sum of HK$73.7 million was paid into the bank account controlled by the 1st accused.
Similarly, significant amounts in the region of tens and hundreds of millions of Hong Kong dollars out of the sale proceeds of CNA and CNB were paid into the 2nd accused’s UB companies and to the 2nd accused.
Of course, I have not forgotten that some of the funds raised was used for the purchase of four farms, and some was paid to Minter Ellison as a deposit, but still, the pocketing of money by the 1st and the 2nd accused described above related to significant sums and happened at an early stage when the funds started to become available.
While the 2nd accused, as the vendor, could be said to be entitled to receive the purchase money paid under the agreement she had with 462, by the verdict of the jury, the approval of the acquisition must have been the result of the conspiracy carried out on 462 and its existing shareholders. It is, therefore, of no assistance to the 2nd accused to say that she was entitled to be paid.
This dissipation of the money raised as soon as the money became available is the feature of the present case which I cannot overlook and this, in my view, militates against the claim that there was no evidence of any actual economic loss and that nobody has come forward to make a claim for compensation.
In any event, the offence of conspiracy to defraud targets not only at actual economic loss, but also putting others’ economic interests at risk, which the culprits intended or realised.
The early dissipation of the funds raised also militates against the submission that there were real farms and real cows to be acquired, for such dissipation is evident of the fact that the 1st and the 2nd accused had, in the forefront of their minds, pocketing the ill-gotten gains of their conspiracies as soon as possible. If not, and if they were concerned about the acquisition, there was simply no reason why the CNC money was used to purchase properties worth NZ$10 million for the 1st accused’s own benefit, and why HK$73.7 million was transferred to the Hong Kong bank account of the 1st accused’s company at that stage when the approval from the New Zealand OIO for the acquisition was still pending.
Another feature which I consider to be an aggravating factor is the fact that the 1st and the 2nd accused, who are not Hong Kong citizens, had put their heads together to hatch these conspiracies to defraud the Hong Kong Stock Exchange and a Hong Kong listed company. On the undisputed evidence, it was the 1st accused who approached PW1 and raised with her the idea of the acquisition. With the assistance of the 2nd accused who, according to PW1, presented herself as an uneager vendor, the 1st accused then gained his way to the board of directors of 462.
I have no doubt that their aim was to take advantage of the well-developed stock market of Hong Kong and to take advantage of 462’s status as a Hong Kong listed company. With such infrastructure and with the use of dishonest means, they eventually succeeded in raising a significant amount of money through carrying out their criminal plan.
This is not without importance for PW1’s unchallenged evidence was that she had told the 1st and the 2nd accused, categorically, that 462 had no money to buy the farms. The deal was undeterred, even with that reminder from PW1, clearly because they were eyeing on the general investing public who would put in money when the acquisition was attractively yet dishonestly packaged.
Needless to say, such criminal conduct is one which should be deterred. Hong Kong is a world renowned international financial centre. The regulatory regime that has been put in place concerning stock trading and listed companies is one of the important factors which contributes to Hong Kong’s success. Those who conspire together to defraud the Stock Exchange by supplying false information commit a vice which may well destroy the confidence of potential investors and that of the general public in our stock market.
Moreover, in the present case, the Stock Exchange had particularly asked about the actual relationship between the 1st and 2nd accused before the circular was issued so much so that there had to be a specific statement on it. Yet, in response, the 1st and the 2nd accused maintained that they were independent. In addition, the Stock Exchange had asked about the accounts and PW1 had then asked the 2nd accused. Again, the 2nd accused adamantly told PW1 that the accounts were true accounts.
The 1st accused, being the co-chairman and director of 462 at the time, did not only act in breach of his duty to the listed company, but he also showed a blatant disregard of the disclosure requirement and the regulatory role performed by the Stock Exchange. As for the 2nd accused, although she was not an officer of 462 and she owed no duty whatsoever to 462, through her participation in the conspiracies, her culpability on this aspect cannot be said to be less than that of the 1st accused.
As observed by Lunn VP in the case Lo:
“As an executive director of Benefun, the 1st defendant was culpable of a gross breach of trust. Although as Mr Lok pointed out, that cannot be said of the 2nd defendant, nevertheless he was party to a conspiracy in which he knew that in implementing the conspiracy to obtain the conspiratorial objectives both Tan and the 1st defendant would each be culpable of a gross breach of trust towards Benefun.”
What can be said in conspiracies of this type is that those who have agreed to defraud a Hong Kong listed company and the Stock Exchange of Hong Kong is seeking to interfere with the decision making process of the listed company on the one hand, and to undermine the proper regulatory function of the Stock Exchange of Hong Kong on the other. Both conspiracies have grave impacts on the shareholders and the general public, not only on a few private individuals.
As I have said in HCCC 561/2013 when sentencing those accused, also of importance is that, in this case, it is clear from the evidence that 462 was very weak financially prior to the acquisition. PW1 frankly admitted this, describing 462 as a “rubbish company”, or something similar.
In such circumstances, agreeing to use dishonest means to cause 462 to approve the acquisition and to issue convertible notes for the acquisition so that the company could, on its face, be resurrected, was a particularly evil act.
The simple reason is this. Since 462 was financially unsound, the shareholders and members of the public would originally be very cautious as to whether to invest in the acquisition. Yet, with the conspiracies and with the false information provided in the announcement and the circular, 462’s shareholders and the investors were deprived of the necessary information to make a well-informed decision. Instead, they were deceived into making one which was based on a fraud practised on the listed company and that practised on the Stock Exchange.
In the course of this trial, witnesses from the Stock Exchange had testified on the importance of providing true and accurate information in the announcement and the circular to be published on the Stock Exchange website. Even without their testimony, it is not difficult to imagine that false information relating to a listed company’s activities could mislead the public, especially in respect of activities like a very substantial acquisition as was the case here.
In turn, the provision of false information to the Stock Exchange would impact on the integrity and the proper functioning of our stock market. These are matters which I cannot ignore.
Sentencing in this case: The 1st accused
Thus, in all the circumstances of this case and having considered the 1st accused’s leading role as outlined above, as well as the scale and duration of the criminal scheme, I consider that a starting point of 8 years and 3 months is appropriate for each of Counts 1 and 2.
In respect of the offence of money laundering, the relevant sentencing factors were identified in HKSAR v Boma [2012] 2 HKLRD 33. Having considered the facts of this case and the HK$73.7 million, which was the undisputed amount of money going into the relevant bank account involved in Count 3, I am of the view that a starting point of 6 years is appropriate for the money laundering count.
As regards the conduct of the 1st accused’s case at trial, I do not consider it to warrant any reduction of sentence. It should be noted that the present case is not like the case of HKSAR v Mak Shing CACC 322/2001, 18 September 2002 (unreported) in which all the basic facts have been agreed and the case was confined to legal argument.
While I am aware that in the case of Xu Xia Li & Anor [2004] 4 HKC 16, a reduction of 3 months was given to the applicant by reason of his good character and the conduct of the defence at trial, and that a reduction of 6 months was given to the respondent in the case of Lo, which I mentioned earlier, for their absence of previous convictions and for their conduct of the defence, each case has to be assessed on its own facts.
In the present case, the admitted facts produced dealt mainly with formal matters like bank transactions, funds and share transfers, announcements, circulars, minutes of meetings and agreements, the incorporation structure and directorship of companies, arrests and searches, the seizure of exhibits and the email exchanges.
Plainly, these are matters which are generally expected to be dealt with by way of admitted facts. On the contrary, if the defence deliberately hindered the prosecution, thus resulting in the prosecution having to incur extra costs, which in the normal course of events would not or need not be incurred, then such may be a ground for ordering costs to be granted to the prosecution.
Given that there was, in this case, a preliminary inquiry held over 69 days between January 2013 and February 2014, and that this trial itself had taken over 100 days, I do not consider the conduct of the defence at trial to merit any reduction in sentence.
That said, I am, of course, not suggesting that merely because the accused had asked for a preliminary inquiry, or that merely because of the length of the trial, the conduct of the defence at trial had become unreasonable. However, even when the conduct of the defence is within the reasonable bounds, there is a difference in the scale of cooperation, and there is a difference between such conduct which warrants a reduction in sentence and such which does not.
In the other extreme, there is such conduct of the defence which should actually justify the award of costs in favour of the prosecution. In short, I do not believe it is the position that whenever admitted facts were produced, or whenever witness statements were read out under section 65B, there would then be an automatic reduction in sentence under the heading of “conduct of the defence”.
As I have mentioned, each case is different, and after considering all the relevant matters concerning the present case, I do not consider it appropriate to grant any reduction in respect of the conduct of the defence at trial. This applies to all three accused, and I am not going to repeat my observations when I deal with the sentence of the remaining two accused later.
In respect of the absence of previous criminal convictions of the 1st accused, I do not find that alone to be a mitigating factor of any force given the serious nature of the present offences. However, I take note of all the good things said on the 1st accused’s behalf by his family members, employees, friends, the District and Legislative Councillors, as well as the contributions he made to help the underprivileged in the Mainland, the charitable donations he made in Hong Kong and the Mainland, as well as the contributions he made to the Samoan community. Having considered all those, I am prepared to grant him a reduction of 6 months.
Apart from what I have mentioned, there are no other matters which would warrant any further reduction in sentence. In other words, the 1st accused is to serve a term of 7 years and 9 months for each of Counts 1 and 2, and a term of 5 years and 6 months for Count 3.
Having considered the totality principle and that the money laundering count is interrelated to the conspiracy counts, I order that all the terms in respect of Counts 1, 2 and 3 are to be served wholly concurrently, making a total term of 7 years and 9 months.
Sentencing in this case: The 2nd accused
As for the 2nd accused, having considered her role in the conspiracies which was no less than that of the 1st accused and all the matters which I have mentioned, I take the view that a starting point of 8 years and 3 months is appropriate for each of Counts 1 and 2.
The 2nd accused was said to have made contributions to a Buddhist temple in New Zealand and have made provisions for an abandoned girl. Although those were benevolent acts of the 2nd accused, I do not consider them to be charitable work in such a nature as to warrant a reduction in sentence. Moreover, the plan to adopt the abandoned girl came at a time when the 2nd accused was already involved in this trial and it was a single incident.
In relation to the other matters urged upon me, including the conduct of the defence at trial and other matters, I also do not consider that any reduction is called for. As a result, the 2nd accused is to serve a term of 8 years and 3 months for each of Counts 1 and 2.
Again, having considered the totality principle, I order that both terms are to be served wholly concurrently resulting in a total term of 8 years and 3 months.
Sentencing in this case: The 3rd accused
I turn now to the 3rd accused. I should mention that although his role was not that of a prime mover, it should not be forgotten that he joined the conspiracies at a critical time, that is, when the financial due diligence was being carried out.
Needless to say, if false financial information was provided, or if the true financial position of the target assets was not revealed, 462 and its shareholders would not be able to make an informed decision as to whether to approve the acquisition.
Equally, if false information was provided to the Stock Exchange, that would no doubt mislead the general public and the potential investors as to the profitability and the potential of the acquisition.
On another aspect, while Mr Khosa emphasised that the 3rd accused’s participation was only limited to the provision of the accounts and, at the most, the drafting of the MD&A, it was the undisputed evidence of PW3 that the 3rd accused, indeed, went on the roadshow with the 2nd accused to Singapore and he was the one explaining the financial data to the potential investors there.
While I accept that in terms of culpability, the 3rd accused’s role was less than that of the 1st and the 2nd accused, and that he apparently acted under instructions rather than on his own, nonetheless, the 3rd accused was a willing participant, and anyone joining a criminal agreement intending that be carried out is a culpable party irrespective of how significant or less significant the part he intends to play in the actual enterprise.
Having considered all the relevant matters mentioned above, and the role played by the 3rd accused, I take the view that in his case, a starting point of 5 years is appropriate for each of Counts 1 and 2.
Of the matters urged upon me in mitigation, while I accept that the 3rd accused would have to start all over again after his release, and that he will be quite alone when serving his term in Hong Kong, I do not consider those to merit any reduction in sentence. After all, these are matters which the 3rd accused should have considered before embarking upon or joining the criminal venture.
In the circumstances, the 3rd accused is to serve a term of 5 years for each of Counts 1 and 2. Having considered the totality principle, I order that both terms are to be served wholly concurrently, making a total term of 5 years.
The prosecution seek a disqualification order under section 168E of the Companies Ordinance, Cap 32. Having considered the facts of this case, I order that all three accused be disqualified from the management, etc, of a company or in any way directly or indirectly concerned with the management, etc, of a company for 10 years.