HKSAR v. Wang Wennin

HCMA 254/2025

[2026] HKCFI 2472

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO 254 OF 2025

(ON APPEAL FROM ESCC 566 OF 2024)

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BETWEEN

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J U D G M E N T

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Background

1.The Appellant was convicted after trial of “Agent Soliciting an Advantage”, contrary to section 9(1)(b)  and 12 (1)  of the Prevention of Bribery Ordinance, Cap. 201 (“POBO”).  He was sentenced to 10 months’ imprisonment.  The Appellant now appeals against conviction only.

2.The particulars of the amended charge alleged that the Appellant, being an agent, namely manager of China Coal Hong Kong Limited (“CCHK”), on 8 October 2018, in Hong Kong, without lawful authority or reasonable excuse, solicited an advantage, namely a gift, loan, fee, reward or commission consisting of a sum in the range of HK$2,000,000 to $3,000,000 from CHOU Tai-ting, the director cum shareholder of High and Mighty Co. Limited (“HMC”)  as an inducement to or a reward for or otherwise on account of the Appellant showing or having shown favour to the said CHOU Tai-ting in relation to his principal’s affairs or business, namely to assist in resolving the dispute between CCHK and HMC on terms and conditions most favourable to CHOU Tai-ting and HMC.

3.The Appellant was legally represented at the trial[1].  At the appeal hearing, he was represented by Mr Ryan Law[2].

Prosecution Case

4.The prosecution called 4 prosecution witnesses (“PW”)  to testify: Mr Wang Xiaogang, the supervisor of the Appellant in CCHK and the director and vice president of CCHK in 2018 (“PW1”); Mr Wang Peng, the director cum business manager of CCHK (“PW2”); Ms Chou Tai-ting (“PW3”); and Ms Chou Liu, daughter of PW3 (“PW4”).  The transcripts of the testimony of PW1, PW3 and DW1 were included in the Appeal Bundle (“AB[3]”).   

5.The facts were largely not in dispute.  The Respondent has succinctly summarized the prosecution case as follows.

6.The Appellant admitted that he was an employee and agent of CCHK at the relevant time (namely between July and November 2018).  CCHK was formerly known as Double Resources Limited.  CCHK was at all material times a local wholly-owned subsidiary of China National Coal Group Corporation (“CNCG”).  The Appellant joined CNCG in 1982 and was subsequently assigned by CNCG to work in CCHK[4].

7.In 1994, CNCG and HMC jointly invested in a property development project[5] in the Chinese Mainland called “Donghai Centre Project”[6] (“the Project”).  At some point in time, after the construction of the Project was finished, disputes arose between CNCG and HMC concerning the sharing of money and/or property relating to the Project (“the Dispute”)[7].  The Dispute was yet to be resolved at the time of the trial of this case.

8.PW1 and the Appellant were tasked to meet PW3 in Hong Kong in an attempt to settle the Dispute.  PW1 and the Appellant together met PW3 on four occasions between July and November 2018[8].

9.On 8 October 2018, upon the Appellant’s request, PW3 met the Appellant in a hotel in Hong Kong in the absence of PW1 (“the Meeting”).  During the Meeting, the Appellant asked PW3 if she could lend him some money.

10.According to PW3, she attended the Meeting together with her daughter.  At the Meeting, the Appellant told her that he was in urgent need of money and asked if she could lend him about HK$2 to 3 million[9]. In return the Appellant would fully stand on her side and assist in resolving the Dispute on terms and conditions most favorable to PW3 and HMC.  If PW3 solved his problem, the Appellant would for sure do his best to solve hers and it would be a deal[10].

11.The conversation between the Appellant and PW3 during the Meeting was recorded by PW3 (“the Recording”)  including their conversation about the solicitation of the subject loan.  The Recording and its transcript were produced (Exhibit P1, P1A, P1B)  [11].

12.PW3 subsequently declined to lend the Appellant any money[12]. A report was made to the ICAC about the Appellant.

13.The Appellant was interviewed under caution, he acknowledged linking the loan solicited from PW3 and his promise to siding with PW3 and HMC in the Dispute relating to the Project.  The voluntariness and accuracy of the video recorded cautioned interview (“VRI”)  of the Appellant were not disputed (Exhibit P3, P3A, P3B)[13].

Defence Case

14.The Appellant elected not to give evidence.  Mr. ZHAO Litao (“DW1”)  was called as a defence witness[14].

15.DW1 was the legal consultant of CNCG.  He had no role in CCHK.  In the 1990s, CNCG cooperated with HMC to jointly develop the Project in Beijing. DW1 was the leader/ convenor of the taskforce which was responsible for dealing with the issues of the Project. The Project was jointly developed by HMC and CNCG in 1994. 

16.HMC and CNCG signed settlement agreements in 1998 to distribute assets but 3 problems[15](the first problem related to the security money of USD 3 million; the second problem concerned with the balance of the project sum; and the third problem was about the real estate)  remained unresolved after the distribution[16].

Issues at trial

17.It was not in dispute that there existed a principal / agent relationship between CCHK and the Appellant; there was a solicitation of the loan; the loan was within the definition of advantage under s2(2)  of POBO.

18.The issues in dispute were summarized by the magistrate as follows:

i.  The Appellant denied that he had influenced or affected his principal's affairs or business.  The Appellant contended that the Dispute and the Project concerned CNCG and HMC, so even if he had somehow shown favor to PW3 or HMC, that did not relate to the affairs or business of CCHK, which was his alleged principal on the charge ( “the Principal Issue”).

ii.  The Appellant denied that he had the intention to influence or affect his principal’s affairs or business as he knew that he did not have such ability to do so (“the Intention Issue”).

iii.  The Appellant relied on the statutory defence in section 9(4)  of the POBO that he sought and obtained permission from DW1 to solicit the loan from Madam Chou (“the Statutory Defence Issue”).

iv.  By the same token, the said permission granted by DW1 amounted to a reasonable excuse (“the Reasonable Excuse Issue”).

The Magistrate’s Findings

19.The magistrate found all the prosecution witnesses to be honest and reliable.

20.The magistrate found CCHK clearly had an interest in the Dispute, the Dispute was related to the share of money and/or property due to CCHK as a shareholder of the holding company of the Project, thus the Dispute was part of CCHK’s affairs and business[17]. She also found the present offence was committed upon making of the solicitation.  It was no defence that the contemplated act or forbearance was not or could not be performed by the agent[18].

21.The magistrate found the Appellant knew the advantage he solicited had the prohibited character and that the loan was solicited on the basis that it was an inducement or reward in relation to the affairs or business of his principal.  Further, the Appellant was fully aware that the advantage he solicited was for doing of acts prohibited in his capacity as an agent of CCHK[19].

22.The magistrate found the evidence from DW1 did not support the assertion a permission was granted by him to the Appellant.  She found there was no statutory defence or reasonable excuse in the case[20].

Grounds of Appeal

23.The Appellant raised two grounds of appeal against conviction:

a.  Ground 1: The magistrate erred in finding the Dispute was between CCHK and HMC and/or it was CCHK’s affairs and business, on the basis that CCHK upon the request of CNCG and/or CCHK had an interest in the Dispute[21];

b.  Ground 2: The magistrate failed to consider or properly consider the evidence of DW1 and found against the statutory defence or reasonable excuse defence.

Appellant’s submissions – Ground 1

24.I will briefly summarize the arguments put forward by Mr Law and the reply of Ms Chit, Counsel for the Respondent.

25.In ground 1, Mr Law submitted that the Dispute was never between CCHK and HMC, but between CNCG and HMC.  The evidence showed, inter alia, the following: 

(a)  the Opening provided that there was a dispute between CNCG and HMC[22];

(b)  the Admitted Facts provided that CNCG and HMC planned to jointly invest in the Project, and the dispute was defined as a dispute relating to the Project (the Dispute); and a meeting was held amongst various individuals within CNCG to discuss the Dispute[23];

(c)  PW1

i.  mentioned that CNCG decided in 2018 to file a lawsuit in Beijing against HMC in relation to the Dispute;

ii.  testified that a taskforce was established to deal with the issue of the Dispute and the head of the Dispute was DW1 being the head of advisor of CNCG;

iii.  confirmed that neither he nor the Appellant had the power to decide how to end the Dispute;

(d)  PW3 confirmed that she signed a sharing agreement with CNCG in 1997 which was the cause of the Dispute;

(e)  DW1 said the authority of handling the Project problem lied within CNCG, not within CCHK; CCHK only acted upon the request of CNCG and, by making use of its regional advantages, it communicated with HMC to handle such a problem. 

26.The prosecution, however, suggested that because CCHK was used by CNCG in the joint venture with HMC to indirectly hold the Project, the Dispute as defined in the Admitted Facts suddenly became one of CCHK’s (“Corporate Vehicle Basis”).  The prosecution further formulated a case of 3 issues[24], security for a mortgage, a 5% balance, and real estate issue (“the 3 Issues Basis”)  to try to argue that the Dispute was CCHK’s.  Not only were these arguments unexplored in the trial, they were fundamentally different from the prosecution’s case as set out in the Opening or the Admitted Facts.  As a result of the prosecution’s change of case, the defence was misinformed, if not misled, into meeting a different case.  Therefore, the Appellant did not have a fair trial; and the magistrate’s findings in the Principal Issue were unsafe and unsatisfactory in that it was based on the prosecution’s changed case.

Respondent’s Reply – Ground 1

27.It was never the prosecution case that CCHK had no interest in the Project or the Dispute.  Nothing in the prosecution Opening or the Admitted Facts had so suggested.  The heading before paragraph 6 of the Admitted Facts clearly titled “The dispute between CCHK and HMC” [25].

28.The assertion that the Dispute and the Project were between CNCG and HMC came from defence, not the prosecution[26].  The Respondent submitted that such assertion was not supported by the evidence canvassed at trial.

29.It was admitted as evidence that:

(1)  CCHK was the wholly-owned subsidiary of CNCG;

(2)  PW1 and the Appellant were personnel of CCHK and they were to meet PW3 in an attempt to settle the Dispute;

(3)  PW1 explained the money for the Project was provided by CCHK and part of the property in the Project were under the name of CCHK and were managed by CCHK[27];

(4)  Both PW1 and DW1 coherently used the term “historical problems of the Hong Kong company” showed the legacy issues regarding the Project had been a long unsolved problem of the Hong Kong company, i.e. CCHK;

(5)  DW1 also explained how CCHK was implicated in the Project i.e. CNCG and HMC agreed to develop the Project and to carry out the development a new company was formed – East Ocean Properties Development Limited, which was jointly owned by CCHK (47%)  and HMC (53%)[28].

30.It was therefore clearly supported by the evidence referred above that CCHK had an interest in the proper settlement of proceeds of the Project and proper distribution of those funds.  It was the legacy issues regarding the Project which led to the Dispute, thus, the Dispute must have involved CCHK as a party against HMC.  The Respondent submitted any lawsuit between CNCG and HMC in relation to the Dispute would not extinguish CCHK’s interest in the Dispute or the Project.

31.In relation to the issue of “Principal’s affairs and business”, the Respondent referred to SJ v Chan Chi Wan Stephen (2017)  20 HKCFAR 98 and submitted that the Appellant must know he was representing CCHK and acting in the capacity of the agent of CCHK at the Meeting.  It was not a situation he was meeting with PW3 in private capacity and asking for a loan from PW3 out of friendship.  The solicitation of the Appellant at the Meeting was made against the following background which included:

(a)  the Appellant was representing CCHK in the taskforce to resolve the Dispute and to meet PW3 representing HMC, the opponent side regarding the settlement of the Dispute;

(b)  while the negotiation regarding the Dispute was on-going, the Appellant initiated, without the knowledge and in the absence of PW1, the Meeting and he met PW3 alone; 

(c)  when the Appellant solicited the loan from PW3, he tried to persuade PW3 that he had the ability to assist PW3 and would be standing fully with her and HMC in the Dispute;

(d)  the Appellant never asked PW1 for permission to solicit a loan from PW3;

(e)  DW1 told the Appellant his dealing as an employee of CCHK with PW3 as a director of HMC should be kept separated from his personal dealing with PW3, and that he (the Appellant)  was standing on the opposite side to PW3.

32.With the above background in mind, the Appellant must know he was representing CCHK and acting in the capacity of the agent of CCHK at the Meeting.  And, the Appellant was using his position as leverage to solicit the advantage.

33.The offence was committed upon the making of the solicitation, it being no defence that the contemplated act or forbearance was not or could not be performed by the agent.  Even the Appellant did not actually have the power, right or opportunity so to do or forbear, it was not a defence.

34.The Appellant’s promise of fully siding with the adversary of his principal, in a matter that had yet been resolved between the principal and the adversary, would no doubt subvert the integrity of the agency relationship between CCHK as the principal and the Appellant as the agent.

Discussion

35.This appeal is conducted by way of a rehearing.  In HKSAR v Hui Lai Ki [2024] HKCFA 7, the Court of Final Appeal held that an appeal under section 113 of the Magistrates Ordinance was by way of rehearing on the evidence before the trial court.  On such rehearing, if the judge came to a view different from the magistrate on the evidence before the court, that was sufficient error to justify a reversal of the decision that itself was an error which justified appellate intervention to reverse the decision of the magistrate.

Discussion – Ground 1

36.The Appellant argued the Dispute suddenly became one of CCHK’s because the prosecution relied upon the Corporate Vehicle Basis and the 3 Issues Basis.

37.I note from P3B[29], the Appellant mentioned matters concerning the Corporate Vehicle Basis and the 3 Issue Basis in his VRI.  The Appellant mentioned that CCHK was mainly responsible for providing funds for the Project[30], and CCHK and HMC jointly held the East Ocean Properties Development Limited[31].  He also talked about the USD3 million[32]; the project sum[33]; the real estate issue[34], all these relate to the 3 Issues Basis.

38.The Appellant in P1B (the transcript of the Recording)  said he came to talk with PW3 about a personal matter but if he used PW3’s money, he had to put in some effort.  He could not borrow her money but did nothing.  He said “I also wish to see if I can help you in this Dong Hai matter”[35].  The Appellant in P3B[36] (his VRI)  admitted that he “we (the Appellant and PW3)  could help each other”, and he was “to act as a mediator”.

39.In other words, matters concerning the Corporate Vehicle Basis and the 3 Issues Basis originated from the Appellant.

40.As such, prior to the commencement of the trial, the defence was fully apprised of these matters from the Appellant’s VRI.  Besides, the defence from the statements of the PWs would have known how CCHK was related to the Dispute. Also, Mr Zhou was called for the defence.  As a result, the defence was aware of how CCHK came into the picture.  Therefore, it was obvious that CCHK had an interest in the Project or the Dispute, and the solicitation act of the Appellant was in relation to CCHK’s affairs or business.  The Appellant’s argument that there was a change of the prosecution case cannot stand, and the contention that “The Defence was kept in the dark throughout the whole trial and was deprived of the chance to examine the prosecution witnesses…”[37] was untenable.

41.Besides, Ms Chit has fully set out the evidence in her written submissions, and I do not intend to repeat in details, which showed that CCHK had an interest in the proper settlement of proceeds of the Project and proper distribution of those funds.  I entirely agree with the reply of the Respondent.  Suffice to say, the prosecution’s stance was clear and well made known to the defence. 

42.In fact, matters concerning this ground of appeal were argued at the trial.  The magistrate was very much alive to the issue.  She identified it as the “Principal Issue”.  In the Statement of Findings, the magistrate said[38]:

“10. This issue is raised in half-time submissions and repeated in closing submissions. The Defence submits Defence exhibits D1,2,3 and 6 to support the case that the Dispute was between HMC and CNCG, but not CCHK. So despite the Defendant saying those solicitation words in the Recording, CCHK would not be influenced or affected.

11. In this regard, I do agree with the Prosecution’s observations. There is no doubt that the major parties to the Dispute, especially in all those related litigations, are CNCG and HMC, but that does not mean CCHK plays no role in it. Mr. Zhou, in his examination-in-chief, explains how CCHK comes into play in the Dispute. He says CCHK was acted upon at the request of CNCG, by making use of its regional advantages, it communicated with HMC to handle such a problem, CCHK was entrusted to assist in resolving such a matter. It is clear from Mr. Zhou’s testimony that communicating with HMC to handle the Dispute and assist in resolving the Dispute is part of the affairs or business of CCHK. The Defendant also admits in the Video Recorded Interview (the “VRI”)  that his main duty as a consultant of CCHK was to follow up, to tie up the loose ends in the litigation related to the Project (footnote 1 – Prosecution exhibit P3B [80].

12. Furthermore, CCHK clearly has an interest in the Dispute, too. According to the evidence of Mr. Wang and Mr. Zhou, and the Defendant’s answers in the VRI (footnote 2 – Ibid., [196]-[230]), the Project was held by a company called East Ocean Properties Development Limited, which was jointly owned by CCHK (47%)  and HMC (53%). In other words, the Dispute relates to the share of money and/or property due to CCHK as a shareholder of the holding company of the Project. The Dispute certainly is part of CCHK’s affairs and business.

13. Therefore, the words said by the Defendant in the Recording are not only relating to CNCG, but also the affairs and business of CCHK, which was the employer and principal of the Defendant. We are not concerned with whether an agency relationship existed between CNCG and the Defendant in this case, conversely, there is no doubt that the principal-agent relationship did exist between CCHK and the Defendant.”

43.The magistrate grasped the points of the argument and provided a detailed analysis.  Her analysis was reasonable and supported by sufficient evidence.

44.This ground fails.

Appellant’s submissions – Ground 2

45.The evidence of DW1 showed that he had given permission to the Appellant to approach PW3 to solicit a personal loan. 

46.The Appellant summarized DW1’s evidence as follows:

(a)  the Appellant had no power or influence at all over how CNCG settled the Dispute with HMC;

(b)  the Appellant had sought DW1’s permission to solicit a loan from PW3;

(c)  he had granted permission to the Appellant and told him that the loan was a private matter between the Appellant and PW3, and did not concern the business of the company;

(d)  whatever means the Appellant used to solicit that loan, the Appellant could not have adversely impacted CNCG’s affairs or interests in any event;

(e)  DW1 told the Appellant that it would be fine no matter how the Appellant approached PW3 to solicit the loan, including lying to PW3.

47.In the circumstances, it was true or might be true that the permission of DW1 included the Appellant lying to / using negotiation tactics against PW3 about being on PW3’s side in the negotiation as recorded in the Meeting, to which the Statutory Defence under sections 9(4)  and (5)  is applicable.

48.Further and alternatively, it was true or might be true that the Appellant honestly believed that DW1 had permitted him to obtain the loan and lie to / use negotiation tactics against PW3 about being on PW3’s side so as to bring PW3 to the negotiation table, which gave rise to the Reasonable Excuse Defence.

Respondent’s Reply – Ground 2

49.As submitted by the prosecution at the trial, DW1 could not have been the principal of the Appellant.  CCHK was the principal.  DW1 was the head legal consultant at CNCG and had no role in CCHK[39].  Even assuming that DW1 had the power as principal to grant permission to the Appellant, the magistrate did not see any evidence supporting that there was a so-called permission[40].

50.Besides, DW1 testified that he had told the Appellant that his dealing as an employee of CCHK with PW3 should be kept separated from his personal dealings with PW3[41].  DW1 did not know how the Appellant discussed or communicated with PW3[42].

51.Regarding any reasonable excuse, the Respondent submitted that there was no direct evidence as to the Appellant’s belief.  He did not refer to his dealing with DW1 in the VRI as being the reason why he thought he was able to leverage his position in CCHK to obtain the loan from PW3.

52.If it was the Appellant’s belief that he had obtained permission from his principal, CCHK, to solicit a loan from PW3, there was nothing to hide from PW1.  This could not explain (a)  why the Meeting was held without the knowledge and in the absence of PW1; and (b)  why the Appellant never informed PW1 of the subject loan he solicited from PW3.

53.There was therefore no evidence to support the assertion that the Appellant obtained permission from his principal or believed permission was granted by DW1 that he could leverage his position in CCHK to obtain a loan from PW3.

Discussion – Ground 2

54.The Appellant said the evidence of DW1 showed that he had given permission to the Appellant to approach PW3 to solicit a personal loan was not correct.  One very important piece of evidence of DW1 was not referred to in the written submissions; however, it was mentioned in the Respondent’s written submissions. At the appeal hearing, the Respondent put much emphasis on such evidence of DW1 given under cross-examination[43]:

Q: Perhaps, I’ll try to just simplify it down even more.  Would you ever have approved Mr Wang (the Appellant)  using his position negotiating as a member of this taskforce to try to leverage a personal loan?

A: It would be impossible for me to approve.  As I have mentioned before, the loan was his personal matters and it was irrelevant to the matters of the company.   

[emphasis added]

55.It is crystal clear from DW1’s evidence that he did not give such permission.

56.In respect of the issues concerning the Statutory Defence and the reasonable excuse, the magistrate dealt with them in this way[44]:

“The Statutory Defence Issue and the Reasonable Excuse Issue

22. These two issues basically share the same analysis of factual evidence and I shall deal with them together. The Defence maintains that Mr. Zhou has already given permission to the Defendant for the solicitation of the loan from Madam Chou. Assuming that Mr. Zhou has the power as a principal to grant permission to the Defendant, I could not see how Mr. Zhou’s evidence assists the Defence in these issues. Where is the so-called permission? I do not see any evidence supporting that allegation. As referred to above, despite that Mr. Zhou allowed the Defendant to use whatever approach to get Madam Chou to negotiate, Mr. Zhou made it clear to the Defendant that his dealings as an employee of CCHK with Madam Chou should be kept separate from his personal dealings with her. Mr. Zhou told the Defendant, ‘the private matters are private matters, and business is business’. Mr. Zhou goes further to say in the cross-examination that it would be impossible for him to approve the Defendant using his position in the negotiation as a member of this task force to try to leverage a personal loan. Mr. Zhou says, ‘the loan was his personal matter, it was irrelevant to the company matters.’

23. Mr. Zhou was aware of the intended loan, he was also aware that the Defendant was entrusted to assist in negotiating the Dispute with Madam Chou, he believed that the Defendant was not in a position to impair the interests of the company. But was he aware of the nexus between the loan sought and the alleged leverage of the Defendant’s position in CCHK? Clearly not, the Defendant said nothing about it. Mr. Zhou could not be possibly granting anything that he was not aware of. Further, Mr. Zhou was clearly not granting any permission to the Defendant to act in the best interest of Madam Chou and stand on the same side with her in the Dispute when he told the Defendant “I believe it won’t affect your relationship with Chou Tai-ting even though you were standing on the opposite side as you are now on the task force’ (emphasis added).

24. As such, there is no reason for the Defendant to believe a permission was granted by Mr. Zhou that he could leverage his position in CCHK to obtain a loan from Madam Chou. I could not find any reasonable excuse in this case.

25. The Defence suggests that the mere fact that someone in the position of Mr. Zhou was willing to testify as a defence witness speaks volumes in his favour.  This is an incorrect approach to assessing the testimony of a witness.  It is well-settled law that being a person in a position higher than others does not make his evidence more credible and reliable.  In any case, as the Court has already found, Mr. Zhou’s evidence does not support the assertion that a permission was granted by him.”

57.I agree with the magistrate.  There is nothing which causes me to consider that the assessment by the magistrate was anything other than sound observation and reasoning, which was well supported by evidence.

58.This ground fails as well.

59.In my view, the magistrate has carefully considered all the evidence.  She has properly and correctly dealt with all the issues.

60.By way of rehearing, I consider that there is sufficient evidence to support the conviction.  I dismiss the appeal and affirm the conviction.

Ms Noelle Aileen Chit, SPP of the Department of Justice, for the Respondent

Mr Ryan Law, instructed by CFN Lawyers LLP, for the Appellant