HKSAR v. Iqbal Rehan
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DCCC 753/2022 & 187/2025 (Consolidated) [2026] HKDC 1784 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CRIMINAL CASE NOS 753 OF 2022 AND 187 OF 2025 ------------------------------
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--------------------------------------------- REASONS FOR VERDICT --------------------------------------------- A. INTRODUCTION 1.The defendant is charged with three offences arising from dealings with property known or believed to represent the proceeds of indictable offences, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap 455 (“OSCO”). Charge 1 additionally invokes sections 159A and 159C of the Crimes Ordinance, Cap 200. 2.Charge 1 alleges that, between 1 March 2012 and 10 September 2016, the defendant conspired with a person named Farrukh Latif (“Latif”) to deal with HK$8,688,661.18 in his Bank of China (Hong Kong) account (012‑363‑1‑013864‑6) (“BOC account”), knowing or having reasonable grounds to believe that the said property, in whole or in part, directly or indirectly, represented any person’s proceeds of an indictable offence. 3.Charge 2 alleges that, between 16 March 2011 and 13 November 2017, the defendant, together with an unknown person, dealt with HK$15,112,253.23 in his HSBC account (015‑802531‑292) (“HSBC account”), knowing or having reasonable grounds to believe that the said property, in whole or in part, directly or indirectly, represented any person’s proceeds of an indictable offence. 4.Charge 3 alleges that, between 9 May 2017 and 9 November 2017, the defendant dealt with HK$482,486.72 in his Hang Seng Bank account (369‑249370‑882) (“HSB account”), knowing or having reasonable grounds to believe that the said property, in whole or in part, directly or indirectly, represented any person’s proceeds of an indictable offence. 5.The defendant pleads not guilty to all three charges. B. BACKGROUND TO THE PROCEEDINGS 6.This case has a lengthy and complex procedural history. The investigation began in December 2015, when the police seized the ATM card of the defendant’s BOC account from Latif, an event which triggered subsequent enquiries into the defendant’s bank accounts and financial activities. Over the following years, the police conducted multiple lines of investigation, including the obtaining of bank records, CCTV footage, tax documents, and extensive fund‑flow analysis. Legal advice was sought from the Department of Justice on several occasions, resulting in additional investigative steps being directed. 7.The defendant was first arrested in January 2019 in relation to the BOC account. During the course of the investigation, and specifically in respect of the BOC account, the police conducted a video‑recorded interview with the defendant on 24 January 2019 (“VRI‑1”). He was subsequently charged in June 2022 with the conspiracy offence now forming Charge 1 (DCCC753/2022). A trial was initially fixed for 10 to 18 January 2024. The defendant was represented by Ms Sujanani Bina Dayaram, instructed by Kevin Ng & Co. However, due to the trial judge’s illness on 10 January 2024, the trial could not proceed and was refixed for 28 May to 5 June 2024. 8.The case proceeded to trial in May 2024. The defendant was represented by the same counsel, Ms Sujanani Bina Dayaram, instructed by Kevin Ng & Co. An Urdu interpreter was arranged for the defendant for the trial. During the defendant’s cross‑examination, issues arose concerning interpretation when the Urdu interpreter twice informed the Court that the defendant’s native language was Pushto. Upon confirmation with the defendant, the defence applied for a trial de novo. The trial judge, Deputy Judge F Cheng, granted the application, and fresh trial dates were fixed for 13 to 30 May 2025. 9.While the case was awaiting trial, the police conducted further enquiries into the defendant’s other two bank accounts, namely the HSBC account and the HSB account, which later formed Charges 2 and 3. A video‑recorded interview was conducted on 19 November 2024 (“VRI-2”). Following further legal advice from the Department of Justice, the defendant was, in January 2025, additionally charged with two counts of dealing with property representing the proceeds of an indictable offence, relating respectively to the HSBC account and the HSB account. These new charges were assigned a new case number, DCCC 187/2025, and were transferred to the District Court in March 2025. The prosecution then applied to consolidate DCCC 187/2025 with the original case, DCCC 753/2022. That consolidation application was heard before me on 25 March 2025. 10.At the consolidation hearing, Mr Newman Wong, counsel then appearing for the defendant and instructed by the same solicitors’ firm, Kevin Ng & Co, did not oppose the prosecution’s application but sought additional time to prepare the case in light of the two newly added charges, indicating that the defence would not be ready to proceed with the trial in May 2025 and applied for an adjournment. The prosecution did not object. I therefore granted the defence application, vacated the trial dates previously fixed for 13 to 30 May 2025, and fixed new dates, with the consolidated trial ultimately scheduled before me from 18 March 2026 to 14 April 2026. A pre‑trial review was subsequently fixed for 10 February 2026. 11.At the pre‑trial review, the defendant, now represented by Ms Annie Lai as counsel and still instructed by Kevin Ng & Co, applied for a stay of the proceedings. To avoid any risk of delaying the scheduled trial, I directed that the stay application be heard separately before the commencement of the trial. In short, the defendant sought a permanent stay of proceedings on the grounds of irremediable, inordinate and unjustifiable delay, breach of the right to trial without undue delay under Article 11(2)(c) of the Hong Kong Bill of Rights and Article 87 of the Basic Law, and the alleged impossibility of securing a fair trial. 12.Having heard submissions from both the prosecution and the defence, I refused the stay application. My ruling on the stay application is annexed to this judgment. The trial therefore proceeded as scheduled. C. THE PROSECUTION CASE 13.Briefly stated, the prosecution’s case is that the funds passing through the defendant’s BOC, HSBC and HSB accounts were wholly disproportionate to his reported income and stated monthly expenses, and that there was no apparent legitimate explanation for their source. The only income reported by the defendant to the Inland Revenue Department (“IRD”) during the relevant periods was salary income, which represented only a fraction of the funds deposited into the three accounts. 14.The prosecution relies on the analysis of the Treasury Accountant (“TA”)[1], which identified substantial fund flows through the three accounts, including a high proportion of cash deposits and withdrawals, deposits commonly ranging from HK$10,000 to HK$50,000, and frequent withdrawals on the same day as, or the day following, deposits. The prosecution contends that these features indicate that the accounts were used as temporary repositories for funds rather than for genuine savings or legitimate business activities, and that the defendant dealt with those funds knowing or having reasonable grounds to believe that they represented, in whole or in part and directly or indirectly, the proceeds of an indictable offence. 15.The prosecution also relies on the defendant’s statements in VRI-1 and VRI-2. In particular, the defendant stated in VRI-1 that he had provided his ATM card to Latif and permitted him to use the BOC account without monitoring the transactions. The prosecution contends that the defendant and Latif agreed to deal with funds through that account while knowing or having reasonable grounds to believe that the funds represented, in whole or in part and directly or indirectly, the proceeds of an indictable offence. 16.The prosecution further relies on evidence that withdrawals were made from the defendant’s BOC and HSBC accounts while he was outside Hong Kong. It contends that these transactions demonstrate that other persons were able to deal with funds in those accounts during his absence. D. THE DEFENCE CASE 17.The defence case is that the defendant personally dealt with funds passing through all three accounts, while also authorising Latif and Toheed to operate the BOC and HSBC accounts respectively on his behalf. It maintains that the transactions were at all times connected with his legitimate mobile-phone, accessories and gemstone businesses, and that the patterns of deposits and withdrawals reflected the high-turnover nature of those businesses. The defence relies on contemporaneous documents, the evidence of the defendant and other defence witnesses, and the report of the defence expert accountant, Lai For Tai (“LFT”), concerning the cash-flow dynamics of the BOC account, in support of its submission that the prosecution has not excluded this business-related explanation as a reasonable hypothesis consistent with innocence. 18.In relation to Charge 1, the defence maintains that Yip Yuen Tung (“YYT”), Latif’s wife, was a significant supplier of mobile phones to the defendant and that the defendant provided his ATM card to Latif as part of a credit-based trading arrangement. Under that arrangement, Latif was authorized to make withdrawals in settlement of payments to YYT after customer deposits had been confirmed. The defendant accepts that he authorized Latif to operate the BOC account on his behalf, including while he was outside Hong Kong, and that he also permitted Latif limited use of the card for personal entertainment expenses. 19.The defence accordingly denies that there was any agreement between the defendant and Latif to deal with criminal proceeds or that the defendant possessed the requisite mens rea for the conspiracy alleged in Charge 1. 20.As regards Charges 2 and 3, the defence maintains that the transactions in the HSBC and HSB accounts were likewise connected with the defendant’s legitimate businesses. In relation to the HSBC account, the defendant’s case is that, while he was in Pakistan, he authorized his cousin, Azrum Toheed (“Toheed”), to operate the account on his behalf by monitoring customer deposits and making transfers to suppliers. 21.The defendant also challenges the voluntariness of VRI-1 and VRI-2 relied upon by the prosecution. E. ISSUES FOR DETERMINATION 22.As the defence does not dispute that the defendant dealt with the funds in question in all three accounts, the actus reus of the substantive dealing offences is not in issue. In the circumstances, the main issues for determination are as follows:
F. OUTLINE OF THE EVIDENCE 23.The prosecution adduced evidence from DPC 7164 (PW1) and PC 13428 (PW2), who conducted VRI-1 and VRI-2 on 24 January 2019 and 19 November 2024 respectively. It also relied on the evidence of the Treasury Accountant, Lee Siu Sing (PW3), who analyzed the transactions in the defendant’s BOC, HSBC and HSB accounts during the relevant periods. 24.Three sets of admitted facts were tendered pursuant to section 65C of the Criminal Procedure Ordinance and marked as exhibits P64, P85 and P87, together with the exhibits referred to therein. 25.The prosecution further relied on documentary records showing withdrawals from the BOC and HSBC accounts while the defendant was outside Hong Kong[2]. 26.As mentioned earlier, the defence challenged the admissibility of both VRIs on the grounds set out in MFI-3. In brief, it was alleged that VRI-1 was obtained without a proper caution or a Pashto interpreter, that the defendant was discouraged from seeking legal assistance, and that his cooperation was induced by representations concerning Police bail. In relation to VRI-2, the defence alleged that the defendant was denied legal assistance and pressured into giving a statement under threat of arrest and refusal of bail. 27.The admissibility of the VRIs was determined by way of the alternative procedure. The defendant gave evidence on the special issue. Having heard the evidence, I ruled that both VRIs were voluntary and admissible. 28.At the close of the prosecution case, there was no submission of no case to answer. I found that there was a case to answer on all three charges. 29.The defendant elected to give evidence on the general issue and called six defence witnesses: the defence expert accountant, LFT (DW2), and five witnesses who claimed to have had business dealings with him, namely Mohammad Nisar (DW3), Khan Sharafat (DW4), Qazi Shahah Uddin (DW5), Khan Shuhab (DW6) and Khan Sayad (DW7). G. THE PROSECUTION’S EVIDENCE G.1 Admitted Facts 30.The main admitted facts agreed between the prosecution and the defence are as follows. (a) Bank Accounts 31.The defendant held three personal bank accounts, namely the BOC, HSBC and HSB accounts. The admitted facts set out the opening and closing dates of each account, the number and aggregate amounts of deposits and withdrawals, together with the relevant affirmations and annexures[3]. (i) BOC account (Charge 1 account) 32.The defendant opened the BOC account on 1 March 2012. He was the sole account holder and signatory, and confirmed that he requested and received an ATM card and its password. 33.Between 1 March 2012 and 10 September 2016, the BOC account received 796 deposits totalling HK$8,900,801.19, and 1,246 withdrawals totalling HK$8,900,801.19. 34.The BOC account was closed by the bank on 10 September 2016 with a balance of HK$65,046.70. (ii) HSBC Account (Charge 2 account) 35.The defendant opened the HSBC account on 16 March 2011. He was the sole account holder and signatory, and that the account was opened for savings. 36.Between 16 March 2011 and 13 November 2017, the HSBC account received 997 deposits totalling HK$15,696,233.58, and 1,290 withdrawals totalling HK$15,696,223.58. 37.The HSBC account was closed by the bank on 13 November 2017 with a balance of HK$5.89. (iii) HSB Account (Charge 3 account) 38.The defendant opened the HSB account on 9 November 2016. He was the sole account holder and signatory. 39.Between 9 May 2017 and 9 November 2017, the HSB account received 41 deposits totalling HK$502,486.72, and 57 withdrawals totalling HK$544,392.66. 40.The HSB account was closed by the Bank on 9 November 2017 with a balance of HK$26,931.66. (b) Asia Smart Corporation Limited (“Asia Smart”) 41.Records relating to Asia Smart were admitted as Exhibits P12 to P17. The defendant was the director of Asia Smart between 12 March 2014 and 16 August 2016, and has been its shareholder since 8 August 2015 till now. 42.The defendant was not the director of any other company registered in Hong Kong. (c) IRD Records 43.The defendant’s individual tax returns for the years 2013/14 to 2016/17, together with the corresponding salaries tax assessments and related correspondence, were admitted as Exhibits P18 to P21. 44.The defendant’s salaries tax assessments for the years of assessment 2013/14 to 2016/17, including the revised assessments for 2015/16 and 2016/17, were produced as Exhibit P22. On 14 November 2019, the defendant lodged objections to the assessments for 2015/16 and 2016/17, and the related correspondence between the defendant and the IRD was produced as Exhibit P22A. 45.Paragraphs 23 and 24 of the admitted facts concern the production of Employer’s Returns for the financial years 2010/11 to 2017/18, filed by various employers including Juvenile Trader Limited, Yeoman Guards Co Limited, Reunion Security, Keswani Shaan, Hoi On Security Co Limited, Efficient Property Management Limited, Pyramid Construction (HK) Co Limited and Asia Smart[4]. It should be noted that the defence does not admit the accuracy of the salary figures stated in those Employer’s Returns, and its agreement to their production does not entail acceptance of the correctness of the amounts stated therein. 46.On 14 May 2013, the defendant registered a partnership business known as Decent International Trading with Toheed. Its stated nature of business was “Trading, Mobile Accessories and General Trading”[5]. 47.The Profits Tax Returns of Asia Smart for the relevant years were produced. The returns for 2014/15, filed on 12 August 2016 and 15 November 2016, were produced as Exhibits P42 and P43, with the audited financial statements for the period ended 31 March 2015 produced as Exhibit P42A. The Profits Tax Returns for 2015/16 and 2016/17, filed on 22 September 2017 and 14 December 2017 respectively, were produced as Exhibits P44 and P45. 48.As at 22 December 2023, the following IRD records were agreed:
(d) Immigration Records 49.Between 1 March 2012 and 13 November 2017, the defendant did not report the loss of his Hong Kong Identity Card. 50.The arrival, departure and extensions records of the Immigration Department of the defendant between 1 July 2012 and 23 October 2023 is now produced as Exhibit P46. 51.Immigration record showed that the defendant departed Hong Kong on 23 May 2021. The defendant returned to Hong Kong on 23 June 2022. (e) Arrest and Charges 52.The defendant was arrested and charged on with money laundering on Charge 1 on 23 June 2022. The defendant was arrested and charged with money laundering on Charges 2 and 3 on 20 January 2025 at 1030 hours in Western Police Station. (f) Matters Relating to Latif 53.The ATM card of the defendant’s BOC account was seized from Latif in 2015. The Certificate of Marriage of Latif and YYT, who married on 17 August 2014, was produced as Exhibit P82. (g) Other Admitted Evidence 54.Various documentary materials were admitted, including affirmations identifying transaction counterparties[7]; business registration records for Quality Telecom, Sun Star HK International (“Sun Star”) and Kowloon & Attock Trading Co. (“Kowloon & Attock Trading”)[8]; CCTV footage showing cash deposits and ATM withdrawals without alteration; corporate and IRD records for S.200 International Limited (“S200”), Kingspec Limited and Amigo Gems Jewellery Limited (“Amigo Gems”)[9]; banking records of Asia Smart and Kingspec Limited[10]; tables identifying counterparties for ATM transfers[11]; tables showing withdrawals made from the BOC and HSBC accounts when the defendant was outside Hong Kong were admitted as Exhibits P47 and P48; and a police‑prepared table shown during VRI‑2 in which the defendant pointed out an error wrongly listing Amigo Gems as a withdrawal counterparty. G.2 Evidence of DPC7164 (PW1) relating to VRI-1 55.On 24 January 2019, PW1, then attached to the Narcotics Division of the Financial Investigation Bureau, attended the defendant’s residence in Mong Kok at about 0655 hours with other officers. He identified himself by showing his warrant card, arrested the defendant for money laundering, and cautioned him. The defendant remained silent. PW1 did not recall the language used and confirmed that no interpreter was present. 56.The defendant was then taken to Mong Kok Police Station. At about 0750 hours, PW1 served on him a Notice to Persons in Police Custody[12]. Both PW1 and the defendant signed the Notice. PW1 entered “English” in the language box, explaining that it referred to the English version of the Notice that had been issued. He asked the defendant whether he understood the rights set out in the Notice and whether he wished to exercise any of them. PW1 testified that he communicated with the defendant in basic English, although he could not clearly recall the details of their conversation. The defendant then requested to contact a lawyer by telephone and ended the call at about 0810 hours. According to PW1, the defendant subsequently said, “No need”, indicating that he no longer required legal assistance. 57.At about 1356 hours, PW1 took the defendant into the video interview room. A Pakistani interpreter, Khan Mohammad Ali, was present. At 1405 hours, PW1 served a second Notice to Persons in Police Custody[13]. He wrote “English/Urdu” in the language box and confirmed that Urdu was the dialect used by the interpreter, which the defendant had requested. The interpreter read the Notice to the defendant in Urdu before he signed it. 58.Between 1430 and 1450 hours, PW1 went through with the defendant the events earlier that morning, assisted by a police translator and the Urdu interpreter. PW1 spoke Chinese, which the police translator translated into English for the Urdu interpreter. 59.Between 1457 and 1656 hours, PW1 conducted the VRI-1 with the defendant, again assisted by the police translator and the interpreter[14]. At the end of the interview, a copy of the DVD was provided to the defendant, who signed for it. 60.PW1 said that at no point during his dealings with the defendant did he make any threats or promises, nor did he suggest that the defendant would not be granted bail if he declined to give an interview. To his knowledge, no other officer made any such threats or promises. 61.Under cross-examination, PW1 confirmed that he had arrested Latif in 2015 for money laundering and had seized from him a BOC ATM card belonging to the defendant[15]. He agreed he had investigated Latif in September 2015 and that Latif was arrested on 4 December 2015. He agreed the defendant was arrested at about 0710 hours on 24 January 2019, and that he told him he was being arrested for money laundering. He did not recall specifying any amount. He confirmed the defendant remained silent upon caution, though this was not recorded in his statements. 62.PW1 accepted conducting a body search of the defendant between 0740 hours and 0748 hours at Mong Kok Police Station. He denied requiring removal of all clothing including underwear. When shown an investigation report he had compiled, which contained an entry “Pol.1123 issued by SSGT KONG Chak Cheung, [CSL3(a)] Removal of Underwear” at 0735 hours, he stated that this was a typing mistake and maintained his denial[16]. 63.Under cross-examination, PW1 disagreed with all suggestions put to him, including the following:
64.In re-examination, PW1 explained that the entry made at 0735 hours in his investigation report referred to Pol.1123, the Notice of Search to the Detainee form[17]. He further explained that “CSL3A” corresponded to “looking into the underwear” under the prescribed search categories. According to PW1, Senior Sergeant Kong had prescribed a Level 2 search, namely “Removal of Clothing”. PW1 accepted that his report incorrectly recorded “removal of underwear” and confirmed that this was the typing mistake to which he had earlier referred. PW1 further explained that the entry at 0810 hours , namely “AP said he no need lawer [sic]”, recorded the defendant saying, after ending the call, that he did not need a lawyer. G.3 Evidence of PC 13428 (PW2) relating to VRI-2 65.On 19 November 2024, PW2 was tasked with interviewing the defendant regarding two bank accounts newly identified during the investigation, namely the HSBC and HSB accounts. He first met the defendant at about 1913 hours in the report room of Western Division Police Station (“WDPS”), where the defendant had attended to report bail. A Pashto interpreter was present throughout. PW2 then accompanied the defendant to his residence in Kennedy Town for a search. No items, documents or electronic devices were seized. PW2 said the search formed part of standard police procedure. They returned to WDPS at about 1950 hours. 66.Between 2005 and 2010 hours, PW2 served a Pol.153 on the defendant[18]. The form bore the signatures of PW2, the defendant and the Pashto interpreter. PW2 communicated with the interpreter in English, and the interpreter interpreted into Pashto for the defendant. PW2 understood that a Pashto interpreter was required because the defendant had previously indicated, during a court appearance, that Pashto was his mother tongue. 67.Between 2050 hours and 2155 hours, PW2 conducted VRI-2 with the defendant in the presence of the Pashto interpreter. At the conclusion of the interview, a copy of the DVD recording was provided to the defendant[19]. 68.PW2 said that the defendant did not request legal assistance at any time before the interview. He denied telling the defendant that contacting a lawyer would result in bail being refused, or that cooperation would lead to bail being granted. He further denied making any threats or inducements and said that, to his knowledge, no other police officer had done so. 69.Under cross-examination, PW2 said that he had joined the investigation team in 2023 and had been instructed more than a week before the interview to conduct VRI-2. He confirmed that the interview had been pre-arranged and that, on 18 November 2024, he telephoned the defendant to inform him that the interview would take place the following day when he returned to report bail. PW2 said that he informed the defendant that he could notify his lawyer. According to PW2, the defendant indicated that he understood, did not require legal assistance, and agreed to attend the interview. 70.PW2 was shown three letters dated 8, 18 and 20 November 2024, being correspondence between the defendant’s solicitors and Senior Inspector Yeung[20]. He confirmed he had seen the letters and agreed that Inspector Yeung was the officer in charge and had instructed him to conduct the VRI-2. 71.Under cross-examination, PW2 was taken to Rule III(b) and (c) of the Rules and Directions for the Questioning of Suspects[21]. He accepted that those provisions governed questioning relating to an offence after a suspect had been charged or informed that he might be prosecuted, and that questioning concerning matters unrelated to that offence remained permissible. 72.PW2 reiterated that VRI-2 concerned only the HSBC and HSB accounts, which had been newly identified during the investigation, and not the earlier charge. He said that the police wished to give the defendant an opportunity to explain the transactions in those accounts. According to PW2, the interview concerned suspected money laundering involving the HSBC and HSB accounts, in respect of which the defendant had not yet been charged, and his questioning did not touch upon matters forming the subject of the earlier charge. 73.PW2 denied telling the defendant that he would be arrested or denied bail if he failed to cooperate. He also denied that the defendant had requested a solicitor at any stage. PW2 said that the Pol.153 clearly recorded whether legal assistance was required and that the Pashto interpreter was present when it was signed. He denied inducing the defendant to participate in the interview. G.4 Evidence of TA (PW3) G.4.1 Background 74.PW3 was the TA attached to the Finance Division, Office of the Forensic Accountants of the Hong Kong Police Force. His expertise was not challenged by the defence. He was engaged to prepare a TA’s report analyzing three bank accounts held in the defendant’s name, together with associated documents, and to comment on LFT report. PW3 confirmed producing a report dated 31 October 2025, consisting of three volumes, and adopted it as part of his evidence[22]. 75.PW3 said Volume 1 contains the introduction, methodology, analysis of findings and his declaration. Volume 2 contains appendices 1–13, being the source documents for his analysis. Volume 3 contains appendices 14–16, including an annotated copy of LFT’s report with PW3’s comments. The documents he referred to when preparing the TA’s report are listed in Appendix 1[23]. 76.PW3 analysed three bank accounts, namely the BOC account (AC01), the HSBC account (AC02) and the HSB account (AC03). His report contains both individual and consolidated analyses of those accounts, examining their overall profile, timeline, transaction amounts, transaction types, counterparty information and speed of funds flow. The relevant periods examined were: AC01 (1 March 2012 to 10 September 2016); AC02 (16 March 2011 to 13 November 2017); and AC03 (9 May 2017 to 9 November 2017). G.4.2 Asia Smart 77.PW3 noted that updated customer information filed in respect of the BOC account on 4 July 2016 referred to Asia Smart. He said the defendant became a director on 12 March 2014, became a shareholder on 8 August 2015, and resigned as a director on 16 August 2016. PW3 referred to discrepancies between certain company records and annual returns concerning appointments and resignations, although he was unable to explain them. He further referred to IRD records showing that Asia Smart commenced business on 28 April 2014, filed tax returns for the years of assessment 2014/15 to 2016/17, and had no business activities after 31 March 2015. The company's audited financial statements for 2014/15 recorded director’s remuneration of HK$60,000, director’s expenses of HK$139,000 and salaries of HK$324,000, although PW3 was unable to determine how much, if any, of those sums had been paid to the defendant. G.4.3 Decent International Trading 78.PW3 referred to a Business Registration Application dated 14 May 2013 showing that the defendant and Toheed were partners in Decent International Trading, whose stated business was the trading of mobile phones, accessories and general merchandise. PW3 said that no tax returns relating to the business were available. G.4.4 Salaries paid to the defendant by employers 79.Referring to paragraphs 23 to 25 of his report, PW3 said that page 8 set out the defendant’s accrued income from various employers, based on Employers’ Returns filed with the IRD, totalling HK$654,157 for the period from 16 March 2011 to 13 November 2017. He further noted that Asia Smart had originally reported the defendant’s income for the years of assessment 2015/16 and 2016/17 as HK$102,000, but subsequently amended both figures to HK$0, as shown in Appendix 2[24]. G.4.5 Land Registry 80.PW3 stated that he made enquiries with the Lands Registry regarding property transactions but found no relevant records. G.4.6 BOC Account- AC01 81.For AC01, total deposits and withdrawals were each approximately HK$8.9 million, comprising predominantly cash transactions in the range of HK$10,000 to HK$50,000[25]. 82.PW3’s counterparty analysis showed that approximately HK$6.6 million of deposits were cash deposits for which no counterparties could be identified[26]. Deposits from Efficient Property Management and Juvenile Traders amounted to HK$174,496 and HK$5,000 respectively, although those figures differed from the corresponding Employers’ Returns filed with the IRD. 83.Cash deposits totalled approximately HK$6.7 million (75.1% of all deposits), while deposits from other counterparties totalled HK$2.2 million (24.3%). The largest deposit counterparties were account no. 012‑722‑1‑021430‑3, RABANI GHULAM, and account no. 012‑758‑1‑015461‑2. Cash withdrawals totalled approximately HK$6.0 million (67.8%), whereas withdrawals to other counterparties amounted to approximately HK$2.8 million (31.6%). The largest withdrawal counterparties were account nos. 012‑722‑1‑021430‑3 and 012‑352‑1‑018463‑9, and THE CHINA BAR. PW3 said he could not identify any deposits attributable to Asia Smart. 84.Applying a first-in-first-out methodology, PW3 calculated that approximately HK$3.5 million, representing 39.6% of the total deposits, was withdrawn on the same day as, or the day following, the relevant deposit[27]. G.4.7 HSBC Account- AC02 85.Applying the same methodology to AC02, PW3 found that total deposits amounted to approximately HK$7.2 million and total withdrawals approximately HK$7.5 million. More than 45% of the deposits and 47.5% of the withdrawals fell within the HK$10,000 to HK$50,000 range. Cash deposits and cash withdrawals amounted to approximately HK$4.7 million and HK$7.8 million respectively[28]. 86.PW3 noted that deposits from other counterparties formed a substantial proportion of the account activity, amounting to approximately HK$10.6 million across 591 transactions. The largest deposit counterparties were Khan Sharafat, Amigo Gems and account no. 249‑565656‑668[29]. He also identified deposits from six entities which appeared to be the defendant’s employers, totalling HK$367,554.90: Yeomen Guards Co Ltd, Juvenile Traders Limited, Efficient Property Management Co Limited, Con Fiducia, Hoi On Security Company Limited and Reunion Sec Ltd, together with deposits from Quality Telecom. 87.Withdrawals to other counterparties amounted to approximately HK$7.8 million across 661 transactions, the largest withdrawal counterparties being account nos. 273‑401067‑668, 557‑868114‑001 and 273‑401059‑668. Applying a first‑in‑first‑out assumption, PW3 calculated that approximately HK$7.1 million, representing 45.3% of total deposits, was withdrawn on the same day as, or the day following, the relevant deposit[30]. G.4.8 HSB Account – AC03 88.PW3 stated that account activity in AC03 was significantly lower than in AC01 and AC02 during the examined period from 9 May to 9 November 2017. The highest monthly activity occurred in May 2017, when deposits amounted to HK$309,985.44, representing 61.7% of total deposits, and withdrawals amounted to HK$326,950, representing 60.1% of total withdrawals. 89.PW3 noted that cash transactions constituted the majority of both deposits and withdrawals. Cash deposits totalled HK$289,300 (57.6%), while the remaining deposits comprised HK$20,000 transferred from AC02 and HK$149,985 from Eastwood Importing Limited. Cash withdrawals totalled HK$278,931.66 (51.2%), with a further HK$265,406 (48.8%) paid to 16 other counterparties. The largest withdrawal counterparties were Volar, Lihua Electrical Company and account no. 325‑821320‑668[31]. 90.Applying a first‑in‑first‑out assumption, PW3 calculated that HK$294,840.52, representing 58.7% of total deposits, was withdrawn between four and seven days after deposit[32]. G.4.9 PW3’s Comments on the LFT Report 91.PW3 noted that the LFT Report dealt only with AC01 and did not address AC02 or AC03. He further noted that deposits and withdrawals through AC02 and AC03 exceeded HK$16 million and were therefore outside the scope of the LFT Report. 92.PW3 criticised the methodology adopted in the LFT Report. He noted that the reporting period in the Cash Flows Statement did not correspond with the bank records and that substantial portions of the analysis appeared to rely on undocumented explanations. According to PW3, many figures were presented as residual amounts without supporting breakdowns or reconciliation against bank records, IRD records or the fund-flow analysis. 93.As regards the purported sources of funds, PW3 noted that the sales said to account for most deposits were unsupported by documentary evidence. He also noted that the names of the purported 3 “Big Buyers”, namely Khan Sayad (DW7), Qazi Shahab Uddin (DW5) and Khan Shuhab (DW6), together with other buyers identified in the LFT Report, could not be matched with counterparties identified in the bank analysis. PW3 further observed that a number of salary figures were inconsistent with IRD records, overstated, incapable of being matched to deposits into AC01, or appeared to be residual figures without supporting breakdowns. 94.As regards the application of funds from AC01, PW3 noted that the largest category, described as purchase invoices in LFT/3, was partly presented as a residual figure without supporting breakdown[33]. He further observed that the bank accounts receiving the relevant ATM transfers did not correspond with the suppliers named in the invoices and that some withdrawals pre-dated the earliest invoice dates by several months. PW3 also identified mathematical inconsistencies and discrepancies in invoice details. He concluded that the invoices and related documents could not be reliably linked to withdrawals from AC01[34]. Although he accepted that the HK$1.3 million transfer involving YYT corresponded with the bank records and counterparty analysis, he noted that the description of that transfer in the LFT Report as an overpayment for mobile phones was unsupported by documentary evidence. PW3 similarly noted that no supporting documents had been provided for alleged packaging expenses of HK$60,000, HK$490,000 categorised as “personal use and business expenses”, or HK$709,000 categorised as “entertainment and personal use”, and PW3 could not explain why “personal use” appeared under two separate headings. 95.PW3 observed that LFT relied on 23 purchase invoices totalling HK$6,306,400, as summarized on LFT/7[35]. He reproduced the LFT Report’s breakdown of suppliers and invoice amounts, and set out the corresponding ATM withdrawals from AC01 to eight bank accounts, with matching amounts and dates[36]. The final column recorded the account holders’ names obtained from police‑provided bank opening forms. 96.PW3 confirmed that none of the eight account holders’ names, including “Ofoha Nonso Emmanuel”, appeared anywhere in the LFT Report, and nothing in that report enabled him to match any of the eight account holders to the 23 invoices. He said the LFT Report contained no documents allowing him to determine the purpose of the withdrawals. 97.PW3 further said that copies of the 23 invoices relied on by the defendant’s accountant were attached on LFT/41 to LFT/63[37]. He identified mathematical errors or inconsistent figures on LFT/46, LFT/47, LFT/50 and LFT/63[38]. Two invoice numbers and one invoice date stated on LFT/7 were inconsistent with LFT/51 and LFT/59[39]. He noted that none of the suppliers named in the invoices could be matched to any counterparties identified in the bank analysis, and the bank accounts receiving the purported invoice payments did not belong to those suppliers[40]. He confirmed that none of the four suppliers appeared as counterparties in AC01, although one supplier, Quality Telecom, appeared as a counterparty in AC02. 98.PW3 concluded that numerous figures and classifications in the LFT Report could not be substantiated and that several stated purposes or natures of transactions could not be ascertained. G.4.10 Consolidated Analysis and Conclusions 99.PW3 said that his conclusions were set out in section C4 of his report[41]. According to his consolidated analysis, total deposits into the three accounts amounted to HK$25,099,521.49 during the examined period. After deducting approximately HK$63,000 in inter-account transfers and HK$102,000 in bank items, the adjusted total deposits amounted to HK$24,934,619.26, being approximately 38.1 times the defendant's identifiable income based on IRD records. PW3 further noted that cash transactions constituted a substantial portion of the account activity, yet the sources of cash deposits, the beneficiaries of cash withdrawals and the purposes of most cash transactions could not be determined. He also observed that all deposited funds were withdrawn during the examined period and that the available materials provided no explanation for the significant disparity between the deposits, income and withdrawals. H. THE EVIDENCE OF THE DEFENDANT (SPECIAL ISSUE) H.1 Background 100.The defendant was born on 25 December 1994 in Pakistan and moved to Hong Kong in 2010 to reunite with his stepfather. He has since lived in Hong Kong with his wife and three children, and said Pashto was his mother tongue, that he could speak some Urdu, and that his English proficiency in 2019 was only basic. H.2 VRI-1 on 24 January 2019 101.At about 0710 hours on 24 January 2019, the defendant was asleep at home when several plainclothes police officers arrived. His wife answered the door. He recalled one female and three male officers. PW1 showed his police identification and told him he needed to go to the police station because there was a case against him and he would be asked questions. 102.The defendant said the officers did not tell him he was being investigated for money laundering. His wife was crying and the officers told her not to panic. He said he was told that if he cooperated, he could return home. He was then handcuffed and escorted to a police vehicle. 103.At the police station, PW1 asked him to sign a Pol 153 without an interpreter present[42]. He communicated with PW1 in English. He told PW1 that Pashto was his mother tongue, but PW1 said only Urdu or Punjabi interpreters could be arranged. He said he could speak some Urdu but not Punjabi. He stated that PW1 did not explain the Pol 153 and told him to “read it yourself”, and that he did not read it before signing. PW1 later conducted a body search requiring him to remove his clothing. He described feeling shocked and scared. 104.The defendant said that, after signing the Pol 153, he requested legal assistance. He telephoned his legal representative, a paralegal named John, but the call was conducted on speakerphone and he was not permitted to speak privately. According to the defendant, John informed him that he was in court and would only be able to attend at around 6 pm. 105.The defendant said that PW1 told him an Urdu interpreter had already been arranged and that, if he cooperated, he would be granted bail and allowed to return home. Conversely, if he waited for a lawyer, the process would be delayed and he might have to remain in police custody overnight. He remained in a police cell until about 1356 hours, when he was taken to the VRI room. According to the defendant, he felt induced to cooperate after being told that “the sooner you do the interview, the sooner you can leave”. 106.The defendant said that during VRI‑1 he did not fully understand English and responded “Okay, I agree” or “Yes” to questions about understanding his rights because he believed cooperation was necessary for his release. He said he did not raise objections as he was scared and inexperienced, noting his wife had been frightened at home and that he had a six‑month‑old infant at the time. H.3 VRI-2 on 19 November 2024 107.The defendant said that, on 18 November 2024, PW2 telephoned him regarding investigations into his HSBC and HSB accounts. According to the defendant, when he said that he required a lawyer, PW2 replied that this was not a matter for the police, that he was required to attend the police station, and that failure to do so would result in his arrest. 108.The following day, when attending WDPS to report bail, the defendant again indicated that he required legal assistance and contacted Mr Kwok, who informed him that Legal Aid approval would be required before he could attend. The defendant said that PW2 told him that the police could not wait, that any delay might affect his bail, that bail was not guaranteed because he had previously left Hong Kong, and that the questions were simple and did not require a lawyer. He said that he felt pressured and believed that cooperation was necessary in order to avoid arrest or detention. 109.A search of his residence was conducted at about 1940 hours, during which no items were seized. At about 2005 hours, a Pol.153 was served on him and interpreted into Pashto. The defendant said that, during VRI-2, he answered some questions but remained silent on others because he believed that he would be arrested or denied bail if he did not cooperate. 110.The defendant confirmed receiving emails from Mr Kwok complaining that counsel had not been notified of VRI-2. He also accepted that a letter dated 8 November 2024 recorded a telephone conversation in which the police requested a further VRI[43]. Although he accepted that, through the interpretation of the Pol.153, he understood that he had the right to have a lawyer present, he denied that he had declined legal representation because he considered it unnecessary. 111.Under cross-examination, the defendant accepted that he had filed both an affirmation and a supplementary affirmation in support of his stay application. Although both documents were in English and no interpreter in his mother tongue had been arranged, he said that he provided instructions to his solicitors, used Google Translate to read the documents, and signed them after satisfying himself that he understood their contents. 112.The defendant further accepted that he communicated with PW1 in English before the interpreter arrived during VRI-1 and did not indicate any difficulty doing so. He explained that PW1's English was basic and that he was able to understand it. He also accepted that he sometimes communicated directly with the police interpreter in English. 113.The defendant further agreed that he spoke with PW2 in English by telephone on the day before VRI-2 without raising any difficulty, and that, before VRI-2 commenced, PW2 again spoke to him in English and he raised no difficulty. He also accepted that there were substantial portions of VRI-2 during which he responded in English, and that his English and Urdu were “about the same”. 114.The defendant accepted that he raised no objection during either VRI. He explained that this was because he felt scared and pressured, believed that cooperation was necessary to avoid detention, and felt “tortured” in the sense that he felt helpless and unheard. I. RULING ON THE SPECIAL ISSUE: VOLUNTARINESS OF THE VRIs 115.The governing principles are well established. The prosecution must prove beyond reasonable doubt, on the whole of the evidence, that a statement was made voluntarily. A statement obtained by oppression or inducement is not voluntary. Even where a statement is voluntary, the Court retains a residual discretion to exclude it where fairness so requires. 116.I have considered the evidence of PW1, PW2 and the defendant, together with the parties’ submissions. The prosecution relied on the defendant’s previous dealings with the Police in January 2018 and the fact that the admissibility of VRI-1 was not challenged at the 2024 trial. I attach no weight to either matter in determining the voluntariness of the two VRIs. 117.Having considered their evidence and observed their demeanour, I found PW1 and PW2 to be honest and reliable witnesses. Their evidence was clear, direct and consistent with the contemporaneous documents, and remained unshaken under cross-examination. 118.I did not find the defendant to be a credible witness on the special issue. Having considered his evidence together with his demeanour as shown in the recordings, I am sure that he was not telling the truth about the circumstances in which he was arrested and interviewed. 119.Although he claimed he only understood “simple English”, his performance during VRI‑1 demonstrated that he could communicate effectively in English. He responded proactively in English for most of the interview, the Urdu interpreter remained largely silent, and his manner was natural and fluent. I am satisfied he was able to understand and communicate adequately. At the 2024 trial, represented by the same firm of solicitors, no suggestion was made that Pashto was his mother tongue; he proceeded on the basis that he spoke Urdu, and no language issue was raised until the very end of that trial, when the Urdu interpreter, not the defendant, indicated difficulty. The evidence clearly shows he was able to manage in both Urdu and English. 120.In relation to VRI-1, I accept PW1’s evidence that he informed the defendant at his residence that he was being arrested for money laundering. At the police station, Pol.153 was served on him. The defendant understood his rights sufficiently to request contact with his legal representative at about 0800 hours and successfully contacted “John”. Exhibit P66 was subsequently explained to him through the Urdu interpreter. I am satisfied that he understood the caution and his rights before VRI-1 commenced. 121.I further accept PW1’s evidence that the defendant subsequently indicated that he did not require a lawyer to be present. VRI‑1 demonstrates that he understood the proceedings, confirmed that he wished to proceed, and raised no complaint at any stage. He was properly cautioned and voluntarily chose to proceed without legal representation[44]. Although the defendant claimed that he was frightened and inexperienced, his demeanour throughout VRI‑1 appeared calm, natural and confident. I did not discern any indication that he was scared, intimidated or unable to exercise his rights. 122.As regards VRI-2, I accept PW2’s evidence that the defendant was informed on 18 November 2024 of the proposed further interview concerning the HSBC and HSB accounts. Both the defendant and his solicitors were informed of the proposed interview. He therefore had adequate notice and an opportunity to seek legal advice before attending the police station the following day. 123.On attending the police station, the defendant was served with Pol.153 in the presence of a Pashto interpreter. He confirmed that he understood his rights and wished to proceed. I accept PW2’s evidence that the defendant indicated that he did not require a lawyer to be present[45]. Exhibit P67 was explained to him before he signed it, and I am satisfied that he understood his rights.In VRI-2, he declined to answer particular questions on a number of occasions. His ability and willingness to do so supports my finding that he understood his rights and exercised them when he chose. 124.I further reject the argument that VRI‑2 contravened Rule III(b). Charge 1 concerned the BOC account, whereas VRI‑2 was directed at transactions in the HSBC and HSB accounts. Indeed, during VRI‑1, the defendant informed PW1 that he only held BOC and Standard Chartered accounts and asserted that his HSBC account had long been closed[46]. The questioning in VRI‑2 therefore concerned separate matters under investigation and not the offence for which he had already been charged. Rule III(b) applies only to questions relating to the charged offence and does not prohibit questioning concerning other suspected offences. 125.I reject the defendant’s evidence that he participated in either interview because of threats, pressure or promises concerning bail. 126.Having considered the evidence as a whole, I am satisfied beyond reasonable doubt that both VRIs were made voluntarily and were not obtained by oppression, threat or inducement. I therefore ruled both VRIs admissible. I am also satisfied that there was no sufficient basis for exercising my residual discretion to exclude either statement. J. THE DEFENDANT’S VRIs J.1 VRI-1 taken on 24 January 2019 127.In VRI-1, the defendant said among other things the following:-
J.2 VRI-2 taken on 19 November 2024 128.In VRI-2, the defendant said, among other things, the following:-
K. DEFENCE EVIDENCE K.1 The Defendant (General Issue) K.1.1 Personal Background 129.The defendant gave evidence that he was born in Pakistan in December 1994 and came to Hong Kong in 2010 at the age of 15 for family reunion with his stepfather. He received high‑school education in Pakistan. He is now a Hong Kong Permanent Resident, married with three children aged 7, 6 and 4, all studying in Hong Kong. K.1.2 The Defendant’s Bank Accounts 130.The defendant said he opened the BOC account in 2012. It was initially used for salary deposits and personal expenses, but from 2013 onwards was also used for his mobile phone trading and general trading businesses, including receiving payments from customers and making payments to suppliers. He updated the account records with BOC in 2016 to reflect its business use. The account was closed on 10 September 2016. 131.The defendant said that most deposits during the charge period represented customer payments made by cash deposit, ATM transfer or bank transfer, while most withdrawals were payments to suppliers. Apart from occasional transactions involving family members and friends, the account was used principally for his business activities and salary deposits. 132.The defendant said he opened the HSBC account in 2011, initially for savings and salary deposits. He later used it for his gemstone and mobile‑phone accessories businesses. According to the defendant, gemstone buyers deposited payments into this account and he withdrew cash to fund telegraphic transfers (“TT”) to suppliers through Asia Smart's ICBC account. The account was closed in 2017. 133.The defendant said that after the closure of the BOC account, he opened the HSB account in November 2016 to continue his mobile‑phone and accessories business. He said the deposits mainly represented customer payments and a larger payment from Eastwood Importing Limited. The account was not used for salary deposits and was closed in November 2017. K.1.3 Employment History 134.The defendant said that after arriving in Hong Kong he held a number of part‑time and full‑time positions, including employment with Juvenile Traders Limited, Branto Indian Restaurant, Hashmi & Co, Yeomen Guards Company Limited, Keswani Shaan trading as Con Fiducia, Efficient Property Management Company Limited and Hoi On Security Company Limited. He said he received salary payments through a combination of cash, cheques and bank transfers. 135.In relation to Juvenile Traders Limited, the defendant said he worked there between 2010 and 2012 and earned about HK$5,000 per month, with occasional bonuses. He further said that during the 2012–2013 tax year he worked only from January to March and earned about HK$15,000 in total. 136.The defendant said that between 2012 and 2015 he also worked as a night‑shift security guard for Yeomen Guards Company Limited. He said Reunion Security Limited was a related company through which bonus payments were made. 137.The defendant further said that between 2012 and 2016 he worked intermittently as a construction site worker while operating his own businesses, earning approximately HK$52,000 to HK$58,000 per year, mostly in cash. He said those earnings were not reflected in the TA's salary analysis. He also said that foremen occasionally asked him to purchase safety equipment, which he bought from KS International and resold at a small profit. He produced receipts in support of those transactions[76]. He described this as a small side business unrelated to his gemstone or mobile‑phone businesses. 138.The defendant agreed that all employers listed in Exhibits P23 to P40 and in MFI‑11 were genuine employers during the charge period. He confirmed receiving HK$508,371.25 into his HSBC account and additional salary into his BOC account, particularly relevant to Charge 1. 139.He said certain salary items were missing from the TA’s report, including salary from Branto Indian Restaurant (which he said was kept by Begum Yasmeen), construction site salary from 2013 to 2016, Uber BV and Tak Bo Construction Works. He explained that salary was sometimes deposited into his BOC account, sometimes into his HSBC account, and sometimes withdrawn in cash and redeposited for business use. He estimated his total salary over the relevant years to be approximately HK$1.05 million. K.1.4 Bank Accounts Used for Salary Deposits 140.The defendant confirmed that some salary payments from Juvenile Traders Limited and Efficient Property Management Company Limited were deposited into the BOC account. He said that the HSBC account was his principal salary account and received salary deposits from Juvenile Traders Limited, Efficient Property Management Company Limited, Yeomen Guards Company Limited, Reunion Security Limited, Keswani Shaan trading as Con Fiducia, Hashmi & Co, Branto Indian Restaurant, Hoi On Security Company Limited and Asia Smart. 141.The defendant further said that the salary figures set out in the LFT Report were derived from information provided by him but were incomplete[77]. According to the defendant, certain HSBC bank statements were unavailable and a number of salary payments were therefore not reflected in the report, including salary from Branto Indian Restaurant, Hashmi & Co and his construction work. He estimated that the omitted salary deposits amounted to “around HK$500,000 something”. K.1.5 Asia Smart — defendant’s Role and Relationship with the Other Director 142.The defendant said that Asia Smart was established with another Pakistani national, Khan Amirullah, who was not a Hong Kong resident. According to the defendant, he became a director in 2014 and received about HK$8,000 per month. He said the business involved gemstone trading on a commission basis and required little capital. He further said that Khan Amirullah operated a separate leather-goods business in Mainland China and used Asia Smart for certain trading and shipping activities. 143.The defendant said that he and Khan Amirullah opened an ICBC corporate account for Asia Smart, which was used to make TTs to Nepalese suppliers[78]. According to the defendant, buyer payments were first deposited into his HSBC account, withdrawn in cash, deposited into the ICBC account, converted into US dollars and then remitted to suppliers. He produced a number of ICBC TT receipts in support of that explanation[79]. 144.The defendant said that he used Asia Smart in connection with both his gemstone and mobile-phone businesses, referring to invoices dated between 4 October 2013 and 10 May 2017[80]. Asia Smart was incorporated in August 2013 and business commenced in 2014. He resigned as director on 16 August 2016 due to declining business but continued working for the company until early 2017. According to the defendant, some transactions were conducted through Asia Smart while others were conducted through his personal accounts, depending on the nature of the transaction. The defendant said he did not share profits with Khan Amirullah, who did not participate in his gemstone or mobile phone business. 145.During cross-examination, the defendant accepted that there were inconsistencies concerning whether transactions conducted through his personal accounts should properly have been treated as his own business or Asia Smart's business. He ultimately maintained that turnover should have been declared in both his personal tax returns and Asia Smart's tax returns because he was the director responsible for the business. 146.The prosecution referred him to his individual tax returns for 2013/14 to 2016/17, in which Part 5 (“Profit Tax”) was left blank[81]. He admitted he had turnover but had not declared it, saying he mistakenly believed only salary information was required and that he had not prepared profit and loss accounts. He agreed that leaving Part 5 blank was false, but said it was due to misunderstanding rather than deliberate concealment. 147.The defendant was further referred to Asia Smart's Profits Tax Returns for 2015/16 and 2016/17, allegedly filed by Hashimi Secretarial Services Limited, which stated that “There has been no business activities during the basis period”[82]. Although he initially maintained that the business conducted through his personal HSBC account was his own business, he subsequently said that the turnover should have been declared in both his personal tax returns and those of Asia Smart. 148.The defendant confirmed that Asia Smart was used for mobile-phone trading, gemstone shipments and, occasionally, accessories. He agreed that directors were responsible for preparing financial statements, and that audited accounts for the period ending 31 March 2015 had been submitted, signed by Khan Amirullah and approved by the board[83]. He accepted he was a director during the relevant period and shared responsibility for the accuracy of the accounts. 149.The prosecution referred the defendant to Asia Smart’s financial statements, which described the company’s principal activity as “fast food activities”. The defendant rejected that description, maintaining that Asia Smart was engaged only in mobile phone, gemstone and accessories trading and suggesting that the description was a mistake. He accepted that none of those activities was identified in the financial statements, but attributed the omission to error on the part of the auditor or the secretarial office. 150.The defendant was further referred to Asia Smart’s Income Statement for the period ended 31 March 2015, which recorded sales of approximately HK$28 million and purchases of approximately HK$26 million. He accepted that these were substantial figures and said that 30% to 40% related to business conducted by Khan Amirullah, including leather goods and security devices, while the remainder related to his own mobile-phone business. He maintained that Khan Amirullah’s Mainland leather-goods business was separate from his own. 151.When asked whether transactions relating to mobile phones and gemstones passing through his HSBC account formed part of his personal business or Asia Smart’s business, the defendant gave evidence that Asia Smart was used for gemstone shipments and outward TT transactions, whereas funds passing through his HSBC account related to his personal business. He accepted that only a small proportion of the HK$28 million sales recorded in Asia Smart’s accounts could be matched to transactions in his HSBC and BOC accounts. He explained that many mobile-phone transactions were conducted in cash and that some business was conducted through Asia Smart’s ICBC account. 152.The defendant disagreed with the prosecution’s suggestion that the sales and purchase figures recorded in Asia Smart’s accounts had nothing to do with his business, maintaining that they reflected a combination of his own business and that of Khan Amirullah. When referred to the “Business Entertainments” figure of HK$36,000 recorded in Asia Smart’s accounts[84], and its contrast with over HK$500,000 in entertainment expenses said to have been incurred through the BOC account, he accepted that the figures did not correspond. He explained that the BOC expenditure related to his personal business dealings and not to Asia Smart’s corporate expenses. 153.The prosecution also referred the defendant to Asia Smart’s balance sheet, which recorded no stock and no accounts payable. The defendant explained that stock was generally retained by suppliers until payment was made and that accounts payable were not reflected because he used personal bank accounts for many transactions. He accepted that he had not provided the auditor with all of his personal bank statements, but said that he had provided ledgers and invoices which were accepted by the auditor. He maintained that the accounts incorporated aspects of his personal business because he had provided invoices relating to gemstone purchases and mobile-phone accessories and conducted some transactions personally and others through Asia Smart. 154.Finally, the prosecution referred the defendant to Asia Smart’s tax filings prepared by Hashmi Secretarial Services. The defendant said Hashmi Secretarial Services was familiar with his mobile-phone business, although he accepted that mobile-phone trading was not mentioned in the tax returns. He was also referred to an Asia Smart invoice issued in October 2013, predating the commencement date of 28 April 2014 stated in the directors’ report. He explained that the company existed before he became a director and that the earlier business had been conducted by Khan Amirullah without his involvement. K.1.6 Decent International Trading 155.The defendant said that he operated Decent International Trading with his cousin, Toheed, from 2013, engaging in general trading, mobile-phone accessories and gemstones[85]. He produced invoices, packing lists and trade-fair documents in support of that business[86]. According to the defendant, before Decent International Trading was established on 14 May 2013, he had already been trading mobile phones and gemstones personally for two to three months from late 2012. He accepted that bank entries and invoices from late 2012 to early 2013 were consistent with such trading activities. 156.The defendant said that, after Decent International Trading was established, most business was conducted through that entity or through Asia Smart. However, after resigning from Asia Smart in August 2016, he resumed trading in his personal capacity because he still held stock. He said that Decent International Trading did not maintain its own bank account and that its business was conducted through his personal HSBC and BOC accounts. He accepted that no tax returns were filed for Decent International Trading, explaining that the business generated little or no profit and that he lacked the resources to prepare audited accounts. 157.When referred to ATM withdrawals from his HSBC account made while he was outside Hong Kong[87], the defendant said that Toheed conducted business on his behalf during those periods. He was unable to recall which withdrawals were business-related and which were personal. He further said that the business had largely wound down by early 2017, although he still held stock and accepted that some transactions in early 2017 might have been connected with Decent International Trading. K.1.7 Gemstone Business 158.The defendant said he commenced a gemstone trading business in late 2012 with the assistance of his cousin, Khan Sayad (DW7), with both receiving a 1% commission on each transaction. He said the business later operated through Decent International Trading, formed in May 2013 with Toheed, and Asia Smart, incorporated in August 2013, of which he became a director in 2014. K.1.7.1 Gemstone Suppliers 159.He identified suppliers from Nepal, India and Pakistan, including Kharel Organisation Pvt Ltd and NB Trading operated by Sagyan Kharel, Melinie Gems & Jewels in India, and NMI Pak International in Pakistan. He produced shipping documents, invoices, packing lists, airway bills and certificates of origin dated between June 2014 and May 2015 showing he was the consignee or authorized collector for shipments from these suppliers[88]. He said shipments were sent by air cargo to Hong Kong and that he personally collected the goods from Cathay Pacific Cargo or Full Brighton Limited. K.1.7.2 Gemstone Buyers 160.The defendant identified several gemstone buyers, including Amigo Gems, Orient Gems Company, Africa Gemstone Hong Kong, Saboor, Hassan Trader, Stump International Trade and Rightful International Limited. He said most payments were made in cash, with one cheque from Africa Gemstone Hong Kong deposited into his HSBC account. 161.He confirmed that deposits from gemstone buyers were made into his HSBC account, including 22 deposits by Amigo Gems totalling HK$1.6 million, deposits by Africa Gemstone Hong Kong (HK$54,560), A R Worldwide (HK$264,050), Hassan Traders (HK$185,050), Orient Gems Company (HK$114,700) and AYR Trading (HK$150,000) [89]. He said these buyers purchased rough stones for cutting and polishing in China. He also confirmed that deposits corresponding to gemstone sales appeared in the List of Bank Transactions for his HSBC account (AC02) in Appendix 7 of Exhibit P68 under the relevant TRN numbers[90]. 162.He said he did not file individual tax returns for 2010–2013 because IRD had not issued demand notes, and that he began filing returns after visiting IRD in late 2013. He said he did not file a tax return for 2017–2018 because his income was low and he had reduced his work due to marriage. K.1.8 Mobile Phone & Accessories Business K.1.8.1 Mobile Phone & Accessories Business buyers 163.The defendant said he began engaging in the mobile phone business in 2012. He rented a small display counter outside Quality Telecom in Chungking Mansions, selling mainly second‑hand mobile phones (about 90% of stock) and some new phones and accessories. Quality Telecom was a wholesaler, while he conducted retail sales, and rent for the display area was under HK$1,000. He said he sold both at the counter and online via Facebook, communicating with customers initially by telephone and later by WhatsApp. Customers included Pakistani, African and Chinese buyers, purchasing quantities ranging from single units to batches of 10–15 units. 164.The defendant said the BOC account was used exclusively for his mobile phone business. He said 54 buyers deposited money into his BOC account for mobile phone and accessory purchases[91]. He recognized Pakistani buyers by full name but not Chinese buyers, who often used nicknames. The defendant produced BOC pay‑in slips, including four dated September 2014, showing deposits made by customers[92]. He stated that most deposits during the charge period were payments from customers made by cash deposit, ATM transfer or bank transfer, often late at night due to customer work schedules and his own night‑shift employment. Customers would send deposit receipts to him via WhatsApp. Withdrawals were used to pay suppliers. He clarified that Begum Yasmeen was not a buyer and had deposited HK$50,805 consisting of salary and personal funds kept for him[93]. 165.During cross‑examination, the prosecution presented ATM surveillance photographs showing individuals depositing cash into the defendant’s BOC account. The defendant identified some of them as customers, including one known by a nickname and another described as a frequent Chinese buyer. For many images, he said the faces were unclear and he could not identify the individuals, but maintained that all were buyers. When challenged that he was merely assuming they were buyers, he said that only buyers would have his account number and that mobile phone trading was commonly conducted in cash. K.1.8.2 Mobile Phone & Accessories Business Suppliers 166.The defendant identified “the Big Four Suppliers” for his mobile phone business: Quality Telecom, Kowloon & Attock Trading, S200 and Sun Star. He said he produced 23 invoices totalling HK$6.3 million[94]. He stated that these invoices represented approximately 60% of his total mobile phone purchases during the charge period. 167.He said these suppliers sourced mobile phones from wholesale markets in Kwun Tong and Ngau Tau Kok, which operated on a cash‑only bidding system. Payments were therefore made mostly in cash, and he paid suppliers in stages depending on customer orders. Large withdrawals from his BOC account were made over the counter because ATM limits prevented him from withdrawing sufficient cash. 168.He confirmed mutual transactions with Quality Telecom. Deposits into his HSBC account represented payments by Quality Telecom for accessories purchased from him, including deposits totalling HK$308,970, HK$60,000, HK$453,998 and HK$95,900[95]. Withdrawals represented payments made by him for mobile phones purchased from Quality Telecom, including withdrawals totalling HK$386,850, HK$375,000 and HK$274,000[96]. He said all these transactions were for mobile phones or accessories. 169.The defendant said profit margins were low, typically HK$20 to HK$50 per phone, and defective returns could result in losses of HK$800 to HK$1,000 per unit, in addition to transportation and entertainment expenses. 170.As regards S200, the defendant said that S200 was merely his supplier of mobile phones. He had no knowledge of their profit tax filings and could not comment on the accuracy of the Profits Tax Returns for 2014/15 and 2017/18[97], allegedly filed by Hashmi Secretarial Services Ltd, which stated “there has been no business activity during the basis period”. He nevertheless confirmed that he continued to purchase mobile phones from S200 in 2016, notwithstanding the declaration of no business activity in the relevant tax return. 171.During cross‑examination, the prosecution referred to the defendant’s list of suppliers and packaging providers[98]. The defendant said he identified Ofa (also known as Ofoha Nonso) Emmanuel as his largest mobile phone supplier, with 18 withdrawals totalling about HK$389,000 to account number 012‑352‑1‑018463‑9, which appeared as the second most frequent withdrawal counterparty in paragraph 60 of Exhibit P68. He said these withdrawals were payments for mobile phones purchased from Emmanuel. 172.He said Emmanuel was connected to Sun Star, one of the Big Four Suppliers, and that Sun Star staff sometimes instructed him to pay Emmanuel directly. The prosecution produced Emmanuel’s bank account opening documents showing he was Nigerian and “self‑employed in fashion wholesale”, suggesting no link to Sun Star or mobile phone trading[99]. 173.The defendant maintained that Sun Star had issued invoices to him and that Emmanuel’s account was one of the payment channels used, but accepted he had no documents proving any connection between Emmanuel and Sun Star, and that payments were made into Emmanuel’s personal bank account. He agreed that the first payment to Emmanuel on 20 August 2013 was made several months before the earliest Sun Star invoice relied upon by the defence, dated 19 May 2014[100]. 174.The defendant also listed two individuals, Sugiyanti and Capocao Carmelita Aliangen, as packaging suppliers. Their account opening forms showed both were domestic helpers[101]. The prosecution suggested it was implausible that domestic helpers operated packaging businesses. The defendant maintained that both women collected discarded mobile phone boxes from shops in Chungking Mansions and sold them to traders, saying this was a common informal practice and that he had personally bought boxes from them. 175.Daily Spark Limited was also listed as a packaging supplier[102]. The prosecution produced bank and Business Registration records showing its business nature as “holiday home rental”, with the business or branch name “Miami Resort” and its nature of business described as “Letting and Retailing” [103]. The defendant accepted these descriptions did not match packaging activities but said he could not recall the details due to the passage of time, maintaining that he had purchased packaging materials from the company or its representatives. 176.The prosecution further noted that some individuals appeared on both the defendant’s buyer list and supplier list, such as Tjhin Fui Kian[104]. The defendant said roles in the trading environment were fluid and that some individuals both bought and sold mobile phones, though he could not recall the specific details of Kian’s transactions. He accepted similar issues arose with other names, such as Li Ching Man appearing both as a customer and a packaging supplier, saying this reflected the informal nature of the trade. 177.The prosecution also challenged the authenticity of certain invoices, including an example where a Nokia Asha 210 was priced at HK$700 in both an invoice dated 13 May 2013 and another dated 26 July 2016[105]. The defendant said prices depended on whether the phones were new or second‑hand and on market demand. He said the invoices were found on his computer, though none relating to HSBC payments were located, and that he likely gave some invoices to his auditor, with gemstone invoices found in old paper form. 178.In relation to Quality Telecom, the defendant had earlier said that persons 2 to 4 were partners. The prosecution pointed out discrepancies, including that Mumtaz Ali and Shah Mumtaz Ali were different individuals, and that Nasir Mohammad had been wrongly included as a partner due to similar names[106]. The defendant accepted these mistakes. The prosecution suggested he had matched similar names to create a false supplier list. The defendant denied fabrication, saying mobile phone trading in Chungking Mansions was informal, packaging materials were often sourced from individuals rather than companies, and suppliers frequently used personal bank accounts for business transactions. He maintained that all entries reflected genuine business dealings. K.1.9 Defendant’s Explanation of Account Transactions and Supporting Documents (MFI‑12 to MFI‑14) 179.The defendant relied on MFI‑12, MFI‑13 and MFI‑14, which he said recorded various legitimate business dealings and mutual lending within his social circle. He explained that deposits from individuals such as Nasar Khan, Muhammad Safdar, Toheed, Zafar Mohammad, Afridi Shahjehan, Elistiani and Yasmeen D Nasar were borrow‑and‑repay arrangements. As regards withdrawals, he said that the 25 withdrawals totalling HK$359,667 were repayments to Toheed, and that nine withdrawals totalling HK$375,000 were payments to Israr Mohammad of Quality Telecom for mobile phones. He accepted that MFI‑14 was not a complete record, saying that many documents had been lost over the years due to frozen accounts, changes of residence and poor record‑keeping. 180.The prosecution submitted that even taking the defence documents at face value, MFI‑12 and MFI‑13 accounted for only about HK$1.95 million, or roughly 12% of the HK$15.6 million in deposits, and that withdrawals explained in MFI‑14 amounted to HK$2.29 million, or about 14% of total withdrawals, with invoices covering only about HK$300,000 (1.5%). The defendant accepted these figures but maintained that missing documents did not mean the transactions were illegitimate. 181.The prosecution suggested that the substantial volume of deposits and withdrawals unsupported by primary documents indicated that the funds were not derived from legitimate business. The defendant firmly rejected that suggestion, maintaining that:
K.1.10 Relationship with Latif and YYT 182.The defendant said he first met Latif between 2011 and 2012 at South Star Telecom in Mirador Mansion, and later met YYT when both visited Branto Indian Restaurant where he worked. Latif introduced YYT as his girlfriend and a major mobile phone supplier. YYT and Latif subsequently married in 2014. The defendant said that Latif did not have a bank account at the time and had once asked him to allow YYT to transfer HK$5,000 to HK$6,000 into his BOC account. The defendant withdrew the money and handed it to Latif. He said this occurred before he started his mobile phone business. 183.In addition to the Big Four Suppliers, the defendant identified YYT of Kingspec Limited as another significant supplier, from whom he said about 40% of his mobile phone inventory was obtained. He said they kept a ledger recording quantities collected and payments made, and that payments to YYT were made by transfers from his BOC account totalling HK$1,219,200[107]. 184.He said he gave his BOC ATM card to Latif between 2013 and late 2015 as a form of security because YYT supplied him mobile phones on credit. Customers would deposit funds into his BOC account, he would verify the payments, and then authorize Latif to withdraw cash or transfer the corresponding amounts to YYT. He said Latif kept the card for about two years, though he occasionally retrieved it two to three times per month to make withdrawals or transfers. Referring to Exhibit P47, he said that even when he was outside Hong Kong on brief trips to China, he remained in contact with Latif, and once he confirmed that a customer’s deposit had cleared, he authorized Latif to withdraw or transfer the money to YYT. 185.The defendant said that deposits were often withdrawn on the same day or the following day because suppliers generally required immediate payment, save for YYT, who extended credit to him. He said that his working capital came mainly from his salary and that, when funds were insufficient, he borrowed from family members or friends and repaid them promptly. He further said that he kept a ledger recording all transactions and reconciled it against his passbook to ensure that withdrawals corresponded with business transactions. The ledger was no longer available, which he attributed to having moved residences. 186.In relation to the photographs of ATM transactions[108], the defendant identified Latif in several images and said that Latif had possession of his ATM card and made transfers to his wife[109]. As regards the remaining images, the defendant said that they were blurred and that he could not identify the individuals concerned, although he assumed that they were buyers or customers. 187.The defendant said that 14 deposits into his BOC account, totalling HK$380,100 and identified in the TA’s Report, represented refunds for defective mobile phones and reimbursements by YYT of personal expenses. He said that the same sum of HK$380,100 was described in the LFT Report as an “overpayment”. He further said that withdrawals totalling HK$26,200 paid to My Affection Limited represented wedding-related expenses incurred on behalf of Latif, which were subsequently reimbursed by YYT[110]. 188.During cross‑examination, the defendant said Latif held his BOC ATM card because Latif’s wife supplied him with mobile phones and Latif needed the card to withdraw money to pay her. He accepted that when he held the card he could withdraw money freely, and when Latif held the card he could still withdraw money over the counter using his passbook. The prosecution suggested that Latif had unrestricted access to the account; the defendant denied this, saying Latif only withdrew money on his instructions. He accepted that Latif made withdrawals and deposits, but said these were always related to business transactions or repayments. The defendant said that Latif used his bank card only with his authorization and solely for business transactions. 189.The prosecution then referred to substantial entertainment spending in the defendant’s BOC account, including frequent payments to The China Bar and Volar. The defendant accepted that he and Latif spent significant amounts at these bars, sometimes exceeding HK$20,000 in a single night. He said he often entertained customers and suppliers in large groups, and that such gatherings were part of mobile phone trading culture. He said Latif also entertained customers on his behalf and sometimes used the ATM card for his own purposes, with reimbursements later made either by Latif or through transfers from YYT. 190.The prosecution produced a document showing that between late October 2014 and early January 2015, the defendant was outside Hong Kong, during which more than HK$500,000 was withdrawn from his BOC account, many of the counterparties being bars[111]. The defendant accepted that Latif had used his ATM card during that period. The defendant said he was not aware of any irregularities in the BOC account during the charge period. He further stated that, to his knowledge, only he had been charged, and neither Latif nor YYT had ever been charged. He maintained that he had no involvement in any criminal activity. 191.The prosecution further suggested that many cash deposits into the defendant’s BOC account represented proceeds of crime, and that he knew or had reasonable grounds to believe this. The defendant strongly denied the allegation, saying all deposits were payments for mobile phones, and that cash trading was standard practice in the mobile phone industry, particularly in Chungking Mansions. K.1.11 HSBC Withdrawals when the defendant was outside Hong Kong 192.The defendant said that when he travelled to Pakistan, he left his HSBC ATM card with his cousin, Toheed, his partner in Decent International Trading. Acting on his instructions, Toheed monitored customer deposits and made withdrawals or transfers to suppliers to maintain ongoing mobile accessory inventory flows. He added that no gemstone business was conducted when he was outside Hong Kong. He stated that he did not share his HSBC ATM card for any purpose unrelated to business, and that Toheed used his bank card only with his authorization and solely for business transactions. 193.The defendant said He said that his business involved legitimate trading of mobile phones, accessories and gemstones and he did not know, nor had reasonable grounds to believe, that any deposits or withdrawals in his HSBC account represented proceeds of an indictable offence. K.1.12 Issues Raised in Cross‑Examination Concerning Tax K.1.12.1 Allegation of Deliberate Tax Evasion 194.During cross-examination, the prosecution asked the defendant whether he had deliberately evaded tax during the relevant years. After being reminded of his right not to answer any question that might incriminate him, he declined to answer the question directly. He was then referred to an affirmation filed in support of his stay application, subsequently admitted on the defence’s application as Exhibit D40, in which he stated that he did not maintain proper business accounts in order to avoid paying tax on his gemstone and mobile-phone businesses. The defendant confirmed having made that statement. He nevertheless maintained that he had not deliberately sought to evade tax in relation to his mobile-phone and gemstone businesses. He explained that the businesses had made no profit, that he lacked the resources to prepare audited accounts, and that he had misunderstood the tax forms, believing that he was required to declare only salary income and not business turnover. K.1.12.2 Asia Smart Salary Filings and Related Tax Returns 195.The prosecution also questioned him about salary filings for Asia Smart. Although he had been a director and received salary, he declared HK$0 income from the company in several tax returns. He accepted signing an employer’s return for 2015/16 declaring HK$102,000[112], but denied signing a replacement form for the same year showing HK$0 salary[113], saying the signature was not his and may have been forged by staff at Hashmi & Co. He said he did not know why anyone would file such a form and denied doing so to evade tax, noting he had already disclosed the HK$102,000 salary. 196.The prosecution further turned to the defendant’s individual tax returns, in which he declared HK$0 salary from Asia Smart in both 2015/16 and 2016/17. In his 2015/16 tax return, he declared HK$123,272 from Efficient Property Management, HK$8,227 from Hoi An Security Co Ltd, HK$3,100 from Yeomen Guards Company, and HK$0 from Asia Smart. In his 2016/17 tax return, he declared HK$99,850 from Efficient Property Management and again HK$0 from Asia Smart. He said he completed both returns in 2019 when his bank accounts were frozen and he could not access his records, and that he simply copied figures shown to him by IRD staff. He accepted that the zero figures were incorrect and that he had failed to declare cash wages and additional salary from Asia Smart. K.1.12.3 2019 Objection to Salaries Tax Assessment 197.The defendant was taken to paragraph 22 of the first set of Admitted Facts concerning his objection lodged on 14 November 2019 against salaries tax assessments for 2015/16 and 2016/17[114]. He confirmed that the Notice of Objection was written and signed by him. He said he lodged the objection because he had not received the tax return due to an incorrect address, his bank account had been put on hold, and IRD had asked him to provide employment returns. In both Notices of Objection, the defendant ticked the box stating that “the salaries income is excessive”, saying he had calculated the figures from employer returns, and complained about the surcharge on the basis that he had not received the tax demand. K.1.12.4 Cash Flow Reconstruction and Undeclared Income 198.Finally, the prosecution referred the defendant to his own cash flow statement, in which he claimed to have earned substantial additional income from construction site wages and Asia Smart salary. He accepted that these amounts were not included in his IRD filings. He explained that he reconstructed his cash flow records only years later, after being charged, and that he had not kept proper records during the relevant period. He denied knowingly failing to declare significant income and said he had attempted to correct the IRD records in 2022 but was told that records older than five years could not be amended. K.1.13 HSB Account Activity and Bar Spending 199.In relation to the HSB account, the defendant accepted that total deposits were approximately HK$502,000 and total withdrawals were approximately HK$544,000, and that the largest counterparty was Volar, with China Bar being another significant counterparty. 200.The prosecution suggested that about 25% of the account activity related to bar spending. The defendant agreed with the arithmetic but said that some of the spending was for entertaining customers, some was personal, and some was made by Latif using his card. The prosecution further suggested that the HSB account, like his other accounts, was used to deal with criminal proceeds. The defendant denied this, stating that all transactions were legitimate. 201.The defendant explained that he often attended gatherings of 20–25 people, including suppliers and friends, and would pay the bill and later receive reimbursement. He said that entertaining customers was part of business culture and helped maintain trading relationships. K.2 DW2 – LFT 202.LFT, a certified public accountant with 28 years of experience, prepared a cash flow statement for the defendant’s BOC account covering 1 March 2012 to 30 September 2016. He had previously produced an expert report in 2024 and adopted his comments at pages 90–91 of Exhibit D3 as his evidence. 203.He said the documents relied upon were listed at page 22 of his report, including the prosecution’s fund flow analysis from the previous trial, lists of ATM deposit and withdrawal counterparties, records showing amounts, depositors and ATM locations, ATM transactions during periods when the defendant was outside Hong Kong, and 23 invoices relating to the defendant’s purchases. 204.LFT said that, in identifying the “Source of Funds” in his report, he relied in several respects on information provided by the defendant, including the following[115]:-
205.LFT said that, in setting out the “Application of Funds” in his report, he listed the relevant categories based on the materials provided to him and the defendant’s instructions, including the following items[120]:-
206.Under cross-examination, LFT accepted that his report did not present a complete or adequately supported picture of the defendant’s fund flows. He explained that proper accounting analysis requires access to primary records such as purchase orders, sales and purchase invoices, receipts, full bank documentation, books of prime entry (cashbooks and journals), books of final entry (ledgers), and management accounts. In this case, he had only bank statements and 23 invoices, and no ledgers, journals, management accounts or financial statements. 207.He agreed that without these records he could not produce a complete or accurate accounting picture, and accepted that he did not conduct an audit and that his work did not constitute a forensic accounting report. His cash flow statement was prepared by combining bank records with the defendant’s explanations, which he could not independently verify. 208.He confirmed that he could not match any of the 23 invoices to withdrawals from the defendant’s BOC account and could not determine the nature or purpose of any fund flow. He accepted that descriptions in his report, such as “three big buyers”, “payment of purchase invoices by ATM transfer”, and “sales to 54 buyers”, were based entirely on the defendant’s instructions. He said he could verify the nature of only one ATM deposit (HK$30,805 said to be salary) [122]. 209.He further confirmed that he had not previously seen the identification list of 54 counterparties until cross‑examination, and agreed that merely knowing names did not assist in verifying the nature of deposits[123]. He accepted that he expressed no expert opinion beyond presenting the cash flow statement and that, save for the matters addressed at pages 90–91 of his report, he had no disagreement with the TA’s comments on his report. K.3 DW3 - Mohammad Nisar 210.DW3 is a Pakistani national and Hong Kong Permanent Resident who operated a second-hand mobile-phone trading business known as Quality Telecom, later Quality Phones. He became a partner in 2010, left the partnership on 28 March 2016, and rejoined on 4 July 2017. 211.DW3 said that Quality Telecom traded exclusively in second-hand mobile phones between 2010 and 2017. He had known the defendant since around 2008 or 2009 and said that, from around 2009/2010 to 2017/2018, the defendant regularly purchased mobile phones from Quality Telecom, usually paying in cash and occasionally by instalments deposited into the company’s bank account. He estimated the total sales to the defendant at HK$1.2 million to HK$1.3 million. DW3 further said that Quality Telecom purchased accessories, including chargers and headphones, from the defendant, estimating the value of such purchases between 2010 and 2011 at HK$300,000 to HK$500,000. 212.DW3 confirmed five invoices issued to the defendant between 2014 and 2016 and said that they had been paid[124]. He accepted that six deposits totalling HK$308,970 from Quality Telecom into the defendant’s HSBC account represented payments for accessories, while 16 withdrawals totalling HK$386,850 represented payments by the defendant for mobile phones[125]. He said that cash transactions were common because many customers were tourists. DW3 further said that bank account no. 002‑7‑438894 belonged to his father, who was also a partner in the business. Nine withdrawals totalling HK$375,000 were made from the defendant’s HSBC account to that account. Although DW3 initially could not recall their purpose, he later said that most transactions involving his father were business-related. 213.Under cross-examination, DW3 accepted that he was not a partner between March 2016 and July 2017 and therefore had no personal involvement in transactions during that period. In particular, he accepted that the invoices dated 19 May and 26 June 2016 were not issued by him and that his knowledge of those transactions was derived from what his sister and other partners had told him. 214.DW3 was also referred to differences in the format, symbols and logos appearing on the said five invoices. He said that his father and brother were responsible for printing invoices at the shop and that he did not know why different symbols, logos or trademarks appeared on them. He further accepted that he could not produce invoices supporting the various deposits and withdrawals said to represent transactions with the defendant, explaining that many invoices had been handwritten and some were missing. He had located only five invoices issued to the defendant and no purchase invoices issued by the defendant. 215.Although Quality Telecom maintained its own bank account, DW3 said that he sometimes used his personal account for business when he did not have the company bank card. He maintained that deposits into the defendant’s account represented payments for accessories and that withdrawals to his personal account represented payments for mobile phones. He accepted, however, that some such withdrawals occurred after he had left the partnership and that his knowledge of those transactions came from others. He also said that Quality Telecom kept some records, but no ledgers or books of final entry, and that he found no prime-entry records relating to the defendant. K.4 DW4 - Khan Sharafat 216.DW4 said that he operated Kowloon & Attock Trading as a sub-wholesaler of second-hand mobile phones. He purchased stock in cash from wholesalers in Kwun Tong and Ngau Tau Kok and resold it at modest margins. He first met the defendant at mobile-phone auctions and said that the defendant regularly purchased second-hand Nokia and Samsung phones from him, usually paying in cash and, for larger orders, sometimes by instalments. DW4 also purchased accessories, including chargers and hands-free devices, from the defendant between 2011 and 2017, estimating the total value at approximately HK$1.5 million, paid by ATM or bank transfer. 217.DW4 confirmed that Kowloon & Attock Trading issued invoices for sales to the defendant and identified the four invoices produced in court as genuine[126]. He said that the invoices were prepared and stamped by staff and that their formats and logos varied because his father and brother were responsible for printing them. Although invoices were issued for all transactions with the defendant, whether involving mobile phones or accessories, DW4 no longer retained copies of the older records and said that the four invoices produced must have been retained by the defendant. 218.Under cross-examination, DW4 was asked why the company chop appeared in an almost identical position on all four invoices despite his evidence that it had been applied manually by staff. He maintained that there were slight differences between the documents, although he accepted that some features appeared similar. He could not explain the similarity but maintained that the invoices were genuine. 219.DW4 said that the business began informally around 2011 and was formally registered in April 2013[127]. He worked full-time as a building attendant while conducting mobile-phone trading outside working hours. He opened a personal HSBC account in December 2012, while Kowloon & Attock Trading opened a business account in May 2013[128]. DW4 accepted that transactions before May 2013 necessarily passed through his personal accounts and that some transactions with the defendant continued to do so thereafter. He explained that money deposited into his personal account would subsequently be transferred to the business account. 220.DW4 was referred to invoices showing Nokia Asha 210 phones priced at HK$700 each and to a Nokia press release dated 24 April 2013 stating an estimated retail price of approximately US$72, or HK$570[129]. He explained that distribution schedules differed between regions, that wholesalers obtained stock from different countries, and that particular models could remain in demand despite the release of newer models. He maintained that the price was determined by supply and demand and that the defendant had specifically requested those models. 221.DW4 said that Kowloon & Attock Trading maintained some records but no ledgers or books of final entry, and that he could find no prime-entry records relating to the defendant. He nevertheless maintained that all transactions with the defendant were legitimate. He denied any involvement in smuggling or parallel trading and explained that cash payments were common because wholesalers required payment in cash. K.5 DW5 - Qazi Shahah Uddin 222.DW5 is a Pakistani national and Hong Kong Permanent Resident who works as a driver. He said that he had known the defendant since about 2010 and regarded him as a personal friend. Between 2012 and 2014, he purchased second-hand mobile phones from the defendant on behalf of his cousin, Hamid Rohail, who lived in Dubai and required the phones for resale. DW5 said that he made no profit from those transactions and was merely assisting his cousin. 223.DW5 said that he purchased phones three to four times a month, usually five to fifteen at a time, at prices ranging from HK$200 to HK$1,000 depending on the model. He estimated the total value of the purchases between 2012 and 2014 at approximately HK$500,000, or HK$100,000 to HK$150,000 per year. The phones were sent to Dubai through cargo operators in Chungking Mansions. 224.DW5 said that payment was generally made by depositing cash into the defendant’s BOC account, either through an ATM or over the counter. As he worked full-time at a construction site, he usually made deposits early in the morning or late at night. When unable to do so himself, he asked friends to make deposits on his behalf, although he said that he personally made most of them. 225.DW5 said that he did not himself operate a mobile-phone trading business or trade for profit. Although he received invoices or receipts from the defendant, he packed them with the phones sent to Dubai and retained no copies. He also retained no Western Union or cargo records. He said that the transactions were arranged by telephone, that he had changed mobile phones many times since 2012, and that no contemporaneous communications or documents remained. 226.Under cross-examination, DW5 accepted that his estimate of approximately HK$500,000 was based on memory rather than documentary records. He confirmed that, about a year earlier, the defendant had asked him to estimate the total value of his purchases over the three-year period and that the figure appearing in the defendant’s accountant’s report reflected the estimate he had provided. He denied that the figure had been fabricated or coordinated with the defendant. K.6 DW6 - Khan Shuhab 227.DW6 is a Pakistani national and Hong Kong Permanent Resident. He was a partner in Al Miraj International, a garment business at Shop 17A, Chungking Mansions, from 2009 to 2017. He said that he sublet a display counter outside the shop to an Indian tenant whom he believed to be Mr Singh for HK$5,000 per month. 228.DW6 said that he had known the defendant since around 2010 and, between 2012 and 2015, purchased second-hand mobile phones from him for Mr Singh, without making any personal profit. He said that the tenant paid him upon receiving the phones, whereupon he paid the defendant, usually in cash either immediately or the following day. The tenant also purchased phones directly from other sellers. 229.DW6 estimated that he purchased between 15 and 20 phones from the defendant per month, although on some occasions none and on others up to 30. Prices ranged from HK$300 to HK$1,000 per phone. He accepted that, depending on the quantities and prices used, the total value of purchases over four years could range from HK$216,000 to HK$1,008,000, and that his estimate of approximately HK$1 million was based on the higher end of those ranges. He accepted that the estimate was approximate and unsupported by documentary records, but denied having coordinated the figure with the defendant. 230.DW6 further said that, from around 2014 or 2015, he purchased gemstones from the defendant for resale to customers and paid by bank transfer. He maintained that deposits from his personal and partnership accounts into the defendant’s HSBC account represented payments for gemstones. In particular, he accepted that 3 deposits totalling HK$103,200 were made into the defendant’s HSBC account and maintained that they related to gemstone purchases[130]. He said that he no longer had the relevant invoices due to the passage of time. 231.DW6 accepted that he retained no invoices, receipts, tenancy agreement or other records relating to the mobile-phone transactions. He could not recall whether he had checked Mr Singh’s identity documents or immigration status, but said that he remembered the tenant paying monthly rent of HK$5,000 and regularly operating the counter. K.7 DW7 - Khan Sayad 232.DW7 said that he came to Hong Kong in 1998 and now assists his adult children in operating a trading and e-commerce business. He described the defendant as both a friend and a relative according to their tribal tradition and said that he had known him since the defendant first arrived in Hong Kong. Between 2012 and 2016, DW7 worked as a site engineer for Sambal ENC and had business dealings with the defendant involving second-hand mobile phones and gemstones. 233.As regards mobile phones, DW7 said that he purchased second-hand Samsung, Nokia, Sony Ericsson and Siemens phones from the defendant on behalf of his friend, Mohammad Rafiq, in Pakistan, without making any profit himself. He sometimes purchased about 50 phones at a time and arranged for passengers travelling to Pakistan to carry between 5 and 25 phones in their luggage, although cargo services were occasionally used. He said that individual phones generally cost HK$500 to HK$1,000 or more and that each bulk purchase ranged from HK$18,000 to HK$40,000. Payment was made in cash or by cash deposit into the defendant's BOC account, sometimes through his wife or friends. DW7 estimated his purchases at approximately HK$400,000 per year, or HK$2 million over five years. 234.As regards gemstones, DW7 said that suppliers in Nepal, including NB Trading and Kharel Organisation, sent rough industrial-grade tourmaline to Hong Kong. He and the defendant placed the gemstones with companies in Hung Hom, including Amigo Gems, Africa Gemstone Hong Kong Limited and Orient Gems. According to DW7, neither he nor the defendant invested in the gemstones; instead, they received a 2% commission, shared equally and deducted from the remittance to the supplier. Purchasers paid the defendant directly. DW7 kept no records of these transactions. 235.Under cross-examination, DW7 confirmed his close relationship with the defendant and that the defendant knew the phones were being purchased for Pakistan. When DW7 was unavailable, he would identify the passenger travelling to Pakistan and the defendant would hand the phones directly to that person. DW7 said that payment was brought from Pakistan in US dollars by passengers, sometimes before and sometimes after the phones were ordered. He did not advise passengers to declare the phones and said that he did not know whether the export of undeclared phones or the importation of second-hand phones into Pakistan was lawful. When allegations of illegality were put to him, he declined to answer. 236.DW7 accepted that he had no invoices, receipts, electronic communications or other documents verifying either the mobile-phone or gemstone transactions, and that his estimate of HK$2 million was based solely on memory. He denied coordinating that figure with the defendant. When shown the defendant's accountant's report attributing HK$2 million in sales to him, he said that he had not previously seen the document and maintained that his estimate had been arrived at independently[131]. 237.DW7 also accepted that a deposit of HK$30,805 made by his wife, Begum Yasmeen, into the defendant's BOC account had been made on his instructions[132]. He could not recall its purpose, given that the transaction occurred in 2012. L. GENERAL DIRECTIONS 238.In reaching my verdict, I remind myself that the burden of proof rests throughout on the prosecution. The defendant bears no burden of proving his innocence. 239.I must be sure of the defendant’s guilt on each charge before I may convict him, and each charge must be considered separately. If the defence evidence pointing to innocence is true or may reasonably be true, the prosecution will not have discharged its burden and the defendant must be acquitted. 240.The defendant’s two video-recorded cautioned interviews constitute mixed statements, containing both inculpatory and exculpatory elements.[1] As explained in HKSAR v Yuen Man Tung (袁文通) [2004] 3 HKC 279, both parts form part of the evidence and must be considered by the Court in determining where the truth lies. I therefore take into account the statements as a whole, including both the inculpatory and exculpatory parts. 241.I further remind myself that an adverse inference may only be drawn if it is the only reasonable inference arising from the proved facts. If the proved facts are equally capable of supporting a reasonable inference in the defendant’s favour, the adverse inference cannot be drawn. M. LEGAL PRINCIPLES Section 25 of OSCO 242.The legal principles governing money laundering offences under section 25 of OSCO are well-established, in particular by HKSAR v Harjani Haresh Murlidhar (2019) 22 HKCFAR 446 and HKSAR v Yeung Ka Sing Carson (楊家誠) (2016) 19 HKCFAR 279. 243.The actus reus of the offence consists of “dealing with” property. Section 2(1) of OSCO defines “dealing” as including, among other things, receiving or acquiring property, concealing or disguising it, and disposing of or converting it. 244.The mens rea under section 25(1) is expressed in the alternative as “knowing” or “having reasonable grounds to believe”. As regards the latter, the Court of Final Appeal in Yeung Ka Sing, Carson at §103 cited Seng Yuet Fong v HKSAR [1999] 2 HKC 833 (at 836):
245.In Harjani Haresh Murlidhar, the Court of Final Appeal reaffirmed that approach and reformulated the test as follows:
246.The first question is subjective only in as much as it requires the tribunal to make findings as to the knowledge of the defendant at the time of the relevant transaction. Where the defendant gives evidence of facts and matters that affected his belief about the nature of the property, the court has to decide whether he is, or may be, telling the truth about the existence of these facts and matters[133]. 247.The second question is objective. Where the court finds that the defendant was, or may have been, telling the truth about the existence of facts and matters that he claims affected his belief, and the court must take those facts and matters into account when answering the second question[134]. 248.It is not necessary, as an element of an offence under section 25(1), for the prosecution to prove that the property dealt with was in fact the proceeds of an indictable offence[135]. 249.If the evidence provided by the defendant as to what he perceived and believed is accepted as true or as evidence which may be true; and if true would be inconsistent with him having reasonable grounds to believe that the property in question represents the proceeds of crime, an acquittal is called for since an essential mens rea element cannot be established against the defendant[136]. 250.Where the defendant provides no evidence at all of his beliefs and perceptions etc, the Court is left to draw whatever inferences may be proper based on the prosecution’s evidence[137]. If the defendant does testify or call evidence as to his state of mind but is entirely disbelieved, the court finds itself essentially in the position described in the preceding paragraph. Rejection of the defendant’s evidence does not of itself establish guilt. The burden remains throughout on the prosecution to prove the offence beyond reasonable doubt[138]. The Offence of Conspiracy 251.Section 159A(1) of the Crimes Ordinance provides that conspiracy consists of an agreement between two or more persons to pursue a course of conduct which, if carried out in accordance with their intentions, will necessarily amount to or involve the commission of an offence, or would do so but for facts rendering its commission impossible. 252.It is the agreement to commit an offence and the intention to take part that form the offence of conspiracy: see R v anderson[139]. A conspiratorial agreement can be expressed or implied or partly expressed and partly implied. Proof of its existence is generally a matter of inference: see R v Brisac[140]; and Churchhill v Walton[141]. 253.As explained by the Court of Final Appeal in HKSAR v Lai Kam Fat (黎錦發) [2019] HKCFA 36 at §34, conspiracy is an inchoate offence. It is constituted by the agreement and the requisite intent, and does not require the actual commission of the underlying offence. 254.If two or more persons make an agreement to carry out a course of conduct in the future and if their intentions, when making that agreement, are such that if the course of conduct is carried out in accordance with their intentions it will necessarily amount to or involve the commission of an offence by one or more of them (i.e. the underlying offence), they will be guilty of conspiracy to commit the underlying offence. This is so even if the facts are such that commission of the relevant underlying offence is impossible. The intention to carry out the underlying offence is a critical element of the offence of conspiracy[142]. 255.In determining whether the agreed course of conduct would necessarily amount to or involve the commission of an offence, both the actus reus and mens rea elements of the underlying offence must be satisfied[143]. 256.In the particular context of a conspiracy to contravene section 25(1) of OSCO, the Court of Appeal held in HKSAR v Lung Ming Chu (龍明珠) [2009] 3 HKC 137 at §39 that
N. EVALUATION OF EVIDENCE 257.Before reaching my verdict, I have considered the evidence as a whole, together with the submissions advanced by both the prosecution and the defence. The fact that I do not expressly refer in these reasons to every aspect of the evidence or every argument advanced does not mean that it has been overlooked or disregarded. N.1 Assessment of the defendant’s Evidence 258.I deal first with the defendant’s evidence. In doing so, I remind myself that the burden of proof rests throughout on the prosecution. The defendant bears no burden of proving his innocence. 259.The defendant’s case was, in substance, that the funds passing through his three bank accounts were derived from, or connected with, legitimate mobile-phone, accessories and gemstone businesses conducted by him during the relevant periods. Having carefully considered his evidence against the documentary and other evidence before the Court, I find his account to be wholly unreliable. In material respects, his evidence was internally inconsistent, inconsistent with contemporaneous records, and at times inherently improbable. I am unable to accept his account as a reliable explanation for the funds passing through the three accounts. The most salient examples are as follows: N.1.1 Inconsistent Explanations Concerning Latif’s Possession and Use of the defendant’s BOC ATM Card 260.It is undisputed that PW1 seized the defendant’s BOC ATM card from Latif in 2015. I find that the defendant gave shifting and materially inconsistent explanations for Latif’s possession and use of the card. 261.In VRI‑1, the defendant said that he had sometimes given his ATM card to a friend known as “Lucky”, whose full name he did not know, and that he could not recall how the card had come into Lucky’s possession. He accepted that “Lucky” and Latif were the same person and confirmed that the CCTV footage showed Latif using the card at ATMs. 262.When asked why he had allowed Latif to use the account, the defendant initially said that he did not know and could not remember how to contact him. He later explained that YYT wished to send money to Latif and that, because Latif did not have a bank account, he gave Latif his ATM card for one or two days[144]. I find this explanation inherently improbable. Latif and YYT were husband and wife, and the defendant gave no satisfactory explanation as to why their personal financial arrangements required the use of his bank account and ATM card. 263.The defendant also said in VRI‑1 that he had “never” checked with the bank as to the transactions conducted through the account and could not distinguish between withdrawals made by him and those made by others[145]. When shown 124 transfer and withdrawal transactions, he claimed not to remember them. That evidence is difficult to reconcile with his evidence at trial that the BOC account was extensively used for his mobile-phone business and contained substantial business receipts. If that were so, one would reasonably expect him to have monitored the account and to have retained some knowledge of the nature of the transactions conducted through it. 264.More significantly, the defendant’s explanation at trial differed materially from that given in VRI‑1. At trial, he said that he had provided the card to Latif as “security” under a credit arrangement whereby YYT supplied him with mobile phones. On that account, Latif retained the card for about two years. This was plainly inconsistent with his earlier account that the card had been provided for only one or two days to enable YYT to send money to Latif. 265.I reject the defendant’s evidence that the card was provided to Latif as security for a legitimate mobile-phone trading arrangement. It is inherently improbable that the defendant would permit Latif to retain and use his personal ATM card over such an extended period, thereby giving him access to an account said to contain substantial business receipts, without properly monitoring the resulting transactions. That account is further undermined by the withdrawals and expenditure at bars made by Latif using the card, including while the defendant was outside Hong Kong. Taken together, the defendant’s shifting explanations, his professed failure to monitor the account, and the nature and duration of Latif’s use of the card render his asserted business explanation untenable. N.1.2 Inconsistent Explanations involving YYT and the Alleged “Security” Arrangement 266.In VRI‑1, when asked whether he recalled making withdrawals or transfers to YYT, the defendant initially said that he could not remember[146]. This is difficult to reconcile with his evidence at trial that he had given his ATM card to Latif as “security” under a credit arrangement with YYT, whereby Latif would withdraw or transfer funds to YYT after customer payments had been deposited into the BOC account. If that arrangement had existed as described, the transfers to YYT would have formed an integral part of the operation of the defendant’s mobile-phone business. 267.Later in VRI‑1, the defendant gave a materially different explanation. He said that YYT had wished to purchase a restaurant and that he had assisted her in applying for a licence because he was then working in a secretarial office. According to the defendant, YYT did not have a bank account, so money relating to the restaurant was deposited into his BOC account and he withdrew cash for her whenever required[147]. 268.The defendant made no mention in VRI‑1 of YYT supplying him with mobile phones on credit, of the BOC account or ATM card being provided as “security”, or of Latif withdrawing or transferring customer payments to YYT under such an arrangement. Nor did he mention that YYT, through Kingspec Limited, supplied approximately 40% of his mobile-phone inventory, that their dealings were recorded in a ledger, or that transfers totalling HK$1,219,200 from his BOC account represented payments to her. Instead, his account in VRI‑1 was that the transactions involving YYT related to her restaurant business. 269.These were not minor differences in recollection. They were fundamentally different explanations concerning the nature and purpose of the same transactions. I am unable to reconcile the restaurant explanation given in VRI‑1 with the mobile-phone credit arrangement advanced at trial. I therefore reject the defendant’s evidence that the BOC ATM card was provided to Latif as security under a legitimate business arrangement with YYT. Further, I do not accept the defendant’s evidence that there existed any mobile-phone business dealings between him and YYT of the kind alleged at trial. N.1.3 Inconsistencies Between the Claimed Businesses and the Substantial Fund Flows 270.The defendant repeatedly asserted that his mobile-phone, accessories and gemstone businesses generated only modest profits and were, at times, loss-making. In VRI‑1, he referred to defective returns, falling gemstone prices, office closures and other expenses. At trial, he similarly maintained that the profit margin on mobile phones was generally only HK$20 to HK$50 per phone, while losses of HK$800 to HK$1,000 could be incurred on a defective unit. 271.These assertions must be considered against the scale and pattern of the fund flows through the defendant’s three accounts. During the charge periods, deposits totalling approximately HK$25 million passed through those accounts, accompanied by frequent and substantial withdrawals and little accumulation of funds. His reported employment income was plainly insufficient to account for transactions of that magnitude. 272.I recognise that substantial turnover is not, by itself, inconsistent with a low-margin business. However, the sheer scale of the fund flows called for a credible explanation as to their source and their connection with the businesses relied upon by the defendant. In my view, the defendant failed to provide a coherent and adequately supported explanation linking those substantial fund flows to his alleged mobile-phone, accessories and gemstone businesses. 273.His explanations concerning his tax position further undermined the reliability of his account. At trial, the defendant maintained that he had not deliberately sought to evade tax in relation to his mobile-phone and gemstone businesses. He said that the businesses had made no profit, that he lacked the resources to prepare audited accounts, and that he had misunderstood the tax forms, believing that he was required to declare only salary income and not business turnover. 274.That evidence was directly inconsistent with his affirmation filed in support of the stay application and subsequently admitted on the defence’s application as Exhibit D40. In that affirmation, the defendant expressly stated: “I did not prepare a full account of the business for I wished to evade tax for the gemstones and mobile phones business.” He confirmed at trial that he had made that statement. I am unable to reconcile that admission with his trial evidence that the non-disclosure of his business activities resulted merely from a misunderstanding of the tax requirements. 275.The defendant further claimed that his gemstone and other trading activities were conducted, at different times, through Decent International Trading and Asia Smart. Yet Decent International Trading had no corporate bank account and no tax returns were filed for it, while its transactions were said to have been conducted through the defendant’s personal accounts. As regards Asia Smart, the defendant maintained that some transactions belonged to the company while others represented his personal business conducted through his HSBC and BOC accounts. His evidence as to the distinction between his personal business and that conducted through Asia Smart was, in my view, shifting and lacked any clear or consistent basis. N.1.4 Evidence Concerning the defendant’s Business Activities and Tax Reporting 276.The defendant maintained that most of his business activities were conducted through Decent International Trading or Asia Smart. However, Part 5 of his individual tax returns, relating to business carried on by a sole proprietor, was left blank over a number of years. He accepted that he had conducted business on his own account and that leaving Part 5 blank was incorrect, but attributed this to a misunderstanding rather than deliberate concealment. 277.In his individual tax returns for 2015/16 and 2016/17[148], the defendant identified Asia Smart under Part 4, relating to salaries tax, but declared his salary from the company as nil. This was inconsistent with his evidence that he had worked for Asia Smart and received approximately HK$8,000 per month. It was also difficult to reconcile with his alternative evidence that he used Asia Smart to conduct his own mobile-phone and gemstone businesses. On either version, his tax returns did not accurately reflect the business activities or income described in his evidence. 278.The defendant further accepted that he had business turnover during the relevant years. However, Asia Smart’s Profits Tax Returns for 2015/16 and 2016/17 stated that “there has been no business activities” during the relevant period[149]. The defendant initially maintained that business conducted through his personal HSBC account was his own business. When confronted with his earlier evidence that Asia Smart had been used to receive shipments and conduct business, he changed his position and said that the turnover should have been declared in both his personal tax returns and those of Asia Smart. I find that his evidence as to whether the relevant activities constituted his personal business or that of Asia Smart was shifting and internally inconsistent. 279.As regards Decent International Trading, the defendant said that it had operated his gemstone and other trading activities after its establishment in 2013. It is undisputed, however, that no Profits Tax Returns were filed for Decent International Trading for the years of assessment 2013/14 to 2017/18. The defendant also said that the business did not maintain its own bank account and that its transactions were conducted through his personal BOC and HSBC accounts. While the absence of a corporate bank account does not, by itself, establish that the business was not genuine, it further obscured any distinction between the defendant’s personal dealings and the business activities he attributed to Decent International Trading. 280.The defendant gave differing explanations for the failure to report his business activities. At various points, he said that the businesses had generated little or no profit, that he lacked the resources to prepare audited accounts, and that he did not understand that business turnover had to be declared. Those explanations were inconsistent with his statement in Exhibit D40 that he had not prepared full business accounts because he “wished to evade tax” in relation to his gemstone and mobile-phone businesses[150]. 281.At trial, the defendant denied that he had deliberately sought to evade tax and attributed the omissions to poor accounting and a misunderstanding of the tax forms. I do not accept that explanation. The defendant had personally attended the IRD to make enquiries, lodged a notice of objection, completed and submitted tax returns, and acted as a director of Asia Smart. Viewed together with his express statement in Exhibit D40, those circumstances render his claimed misunderstanding of the distinction between salary income and business turnover inherently unconvincing. 282.I find that the defendant’s tax records do not provide reliable support for the business activities described in his evidence. More importantly, his shifting accounts as to whether the relevant transactions belonged to him personally, to Asia Smart or to Decent International Trading materially undermine the reliability of his explanation for the funds passing through the three accounts. N.1.5 Inconsistencies in the defendant’s Evidence Concerning Asia Smart N.1.5.1 The defendant’s Role, Salary and Tax Filings 283.In assessing the defendant’s evidence concerning his role in and salary from Asia Smart, I note several material inconsistencies. He accepted that he was a director of Asia Smart and had personally signed an employer’s return in April 2016 declaring a director’s salary of HK$102,000. Yet, in his individual tax return, he declared his salary from Asia Smart as “0”, a position which he maintained in his subsequent objection to the IRD. 284.The defendant sought to distance himself from a replacement employer’s return bearing a similar signature by alleging that his signature had been forged by staff of the secretarial company. There was, however, no evidence supporting that allegation, and he was unable to identify the person allegedly responsible. His further explanation that he had forgotten about the employer’s return which he himself had signed when completing his individual tax return is, in my view, unconvincing. I do not accept his explanation for the inconsistent declarations concerning his salary from Asia Smart. N.1.5.2 The Invoices, Commencement of Business and Financial Statements 285.The defence relied upon 21 invoices purportedly issued by Asia Smart between 4 October 2013 and 10 May 2017[151], which the defendant relied upon in support of his account of trading activities involving gemstones. Those invoices must, however, be considered against his earlier account in VRI‑1 that he was merely a salaried employee assisting Khan Amirullah, that the gemstone business had ceased in 2013 or 2014, and that he had no involvement in it after 2013[152]. 286.There are further material difficulties with those invoices. They span the period from 2013 to 2017, yet Asia Smart’s Profits Tax Returns for 2015/16 and 2016/17 stated that “there has been no business activities during the basis period” [153]. The existence of invoices purporting to evidence trading activities during the relevant periods is difficult to reconcile with the company’s own tax filings stating that it had no business activities. 287.There is also a chronological inconsistency. Asia Smart was incorporated in August 2013, but its financial statements for the period ended 31 March 2015 recorded that the company commenced business on 28 April 2014[154]. Yet one of the invoices relied upon by the defence was dated 4 October 2013[155], more than six months before the recorded commencement of business. The defendant did not become a director until 12 March 2014. His explanations for this discrepancy shifted. He initially sought to explain his involvement by reference to his employment in the gemstone business, but later maintained that the commencement date merely reflected the period covered by the audited accounts and that the earlier business had been conducted by Khan Amirullah without his involvement. 288.Of further significance, the same financial statements recorded that “the principal activity of the company was fast food activities” [156]. That contemporaneous description does not support the defendant’s evidence that Asia Smart was being used to conduct the gemstone or mobile-phone trading activities which he relied upon at trial. 289.Viewed cumulatively, the invoices, the recorded commencement date, the Profits Tax Returns and the description of Asia Smart’s principal activity do not present a coherent picture of the trading business described by the defendant. I therefore do not regard the 21 invoices as providing reliable support for his account that Asia Smart was engaged in the gemstone or mobile-phone trading activities relied upon by him at trial. N.1.5.3Asia Smart’s Reported Sales Figures and the defendant’s Explanations 290.The defendant accepted that Asia Smart’s financial statements recorded sales of approximately HK$28 million and purchases of approximately HK$26 million for the period ended 31 March 2015. When those figures were compared with the deposits and withdrawals in his personal HSBC and BOC accounts, he accepted that only a small proportion of the HK$28 million in reported sales could be matched to those accounts. He sought to explain the discrepancy by saying that many mobile-phone transactions were conducted in cash, that some transactions passed through Asia Smart’s ICBC account, and that the reported figures represented a combination of his own business and that of Khan Amirullah. 291.I do not find those explanations satisfactory. In particular, they sit uneasily with the defendant’s shifting evidence as to which business activities belonged to him personally, which belonged to Asia Smart, and which were conducted by Khan Amirullah. They provide no coherent basis upon which the substantial transactions through the defendant’s personal accounts can be reconciled with Asia Smart’s reported sales and purchases. 292.There is a further inconsistency concerning business entertainment expenditure. Asia Smart’s financial statements recorded only HK$36,000 under “business entertainments”, whereas the defendant claimed that approximately HK$500,000 of expenditure through his BOC account represented entertainment expenses. His explanation that the HK$36,000 related only to corporate expenses and had nothing to do with his personal business does not satisfactorily resolve the discrepancy, particularly given his own difficulty in maintaining a consistent distinction between his personal business and that of Asia Smart. 293.Taking these matters together, I find the defendant’s evidence concerning the nature and extent of his business activities through Asia Smart to be internally inconsistent and unsupported by the company’s contemporaneous financial and tax records. I do not accept his evidence insofar as he relied upon Asia Smart and the 21 invoices as an explanation for the substantial fund flows through his personal bank accounts. N.1.6 Inconsistencies Between the defendant’s Claimed Income and His Tax Returns 294.In assessing the defendant’s evidence concerning his income during the charge periods, I note that he repeatedly maintained that PW3’s analysis, the employer’s returns and even the schedules prepared by LFT did not fully reflect the salary he had received. He sought to identify additional salary and commission payments which, he said, had been omitted. In particular, he claimed that HK$1,051,634 had been received by way of salary into his BOC account and that further salary payments had been received into his HSBC account[157]. When taken through MFI‑11 in cross-examination to identify salary payments said not to have been included in LFT/5, he identified a further HK$159,028. On the defendant’s own account, therefore, his total salary receipts amounted to approximately HK$1.2 million. 295.The defendant also claimed to have earned commission from gemstone transactions. He identified, for example, a sale of HK$559,135 to Amigo as giving rise to a 1% commission of approximately HK$5,590, and said that he earned further commissions in connection with items purchased for use on construction sites[158]. 296.Ultimately, the defendant relied on an overall figure of approximately HK$1.2 million for his salary and commission income during the relevant period. That figure, even on his own account, represented only a small proportion of the approximately HK$25 million deposited into his three accounts. I accept the prosecution’s submission that the defendant’s claimed salary and commission income therefore did not account for the great majority of the deposits passing through those accounts[159]. 297.There is, moreover, a substantial inconsistency between the income claimed by the defendant at trial and the income recorded in tax returns which he signed as “true, correct and complete”. Those returns recorded no commission income and disclosed salary income as follows:
As at 22 December 2023, the defendant had not filed tax returns for the tax years 2010/11, 2011/12, 2012/13 and 2017/18[164]. 298.The income now asserted by the defendant is plainly inconsistent with the income disclosed in his tax returns. If the salary and commission income now claimed by him was in fact received, his tax returns did not accurately disclose that income. If it was not received, his evidence at trial materially overstated his legitimate income. Either way, the two accounts cannot readily be reconciled. The inconsistency is further illustrated by the defendant’s Notices of Objection for 2015/16 and 2016/17, in which he selected the ground that “my salaries income is excessive”, notwithstanding his evidence at trial that his actual income during the relevant period was substantially greater than that reflected in the available records. I find his evidence concerning the amount of his salary and commission income unreliable. 299.The defendant sought to explain part of the discrepancy by saying that certain employments were not reflected in PW3’s analysis. He said that he worked part-time at Branto Indian Restaurant between 2010 and 2012, at Hashmi & Co between 2012 and 2013, and that he also earned daily wages from part-time construction work. PW3 made clear, however, that the period examined in respect of the BOC account commenced on 1 March 2012. Income earned before that date would therefore fall outside the scope of that analysis. 300.The defendant also estimated that “around HK$500,000 something” in salary deposits relating to his HSBC account had not been identified. No documentary basis was produced for that estimate, and it was not reflected in his tax returns. I therefore do not accept his assertion that substantial additional salary income omitted from the available records provides a satisfactory explanation for the deposits into his accounts. N.1.7 Alleged Mobile Phone Business with DW6 301.The defence relied on MFI‑14, in particular Tables 11 and 12, in support of the alleged mobile-phone dealings between the defendant and DW6, Khan Shuhab. The bank records, however, provide limited support for the scale of business alleged. The only transactions identified with Al Miraj International were one deposit of HK$15,400 and one withdrawal of HK$2,500. The remaining identified transactions were between the defendant and DW6’s personal account. Although that fact does not, by itself, exclude the possibility of business dealings, the transactions identified in the bank records do not substantiate mobile-phone purchases approaching the scale alleged. 302.This is significant because DW6 estimated that his purchases from the defendant between 2012 and 2015 totalled approximately HK$1 million. As emerged in his evidence, however, that figure was not derived from invoices, receipts or other contemporaneous records. DW6 accepted that, depending on the quantities and prices adopted, the total value of the alleged purchases over the four-year period could range from HK$216,000 to HK$1,008,000, and that his estimate of HK$1 million was based on the higher end of those ranges. The figure was therefore an approximate reconstruction from memory rather than a sum independently demonstrated by the underlying records. 303.The defendant’s own account gives rise to a further difficulty. In VRI‑1, he said that his mobile-phone business had lasted for about two years and had generated no profit[165]. That account is difficult to reconcile with the case subsequently advanced at trial of substantial and continuing mobile-phone dealings with DW6 between 2012 and 2015. The difference is material, particularly given the reliance placed upon those alleged dealings as an explanation for funds passing through the defendant’s accounts. N.1.8 Reliability of the defendant’s Account of Alleged Suppliers and Packaging Providers 304.The defendant relied on a list of alleged mobile-phone suppliers and packaging providers to explain certain withdrawals and transfers[166]. A number of the persons or entities identified by him were, however, described quite differently in their bank account opening documents. Ofoha Nonso Emmanuel, whom the defendant identified as a mobile-phone supplier, was recorded as being engaged in fashion wholesale[167]. Sugiyanti and Capocao Carmelita Aliangan, whom he identified as packaging providers, were recorded as domestic helpers[168]. Daily Spark Limited, to which HK$3,500 was attributed as packaging expenses, was recorded as carrying on a holiday home rental business[169]. 305.The defendant also claimed that the “Identification List of Counterparties of ATM Transfer Deposits and Withdrawals” relating to the BOC account represented customers and suppliers of his mobile-phone business[170]. There were, however, inconsistencies within the classifications themselves. Li Ching Man was identified both as a mobile-phone customer and as a counterparty for packaging expenses, while Tjhin Fui Kian appeared as both a customer and a supplier. The defendant did not provide a satisfactory explanation for those differing classifications. 306.I do not treat the descriptions in the bank account opening documents as conclusive evidence of the counterparties’ actual occupations at the time of the transactions, nor do I assume that a person recorded as a domestic helper, or an entity recorded as carrying on a different business, could not have engaged in other activities. Nevertheless, those contemporaneous descriptions provide relevant context against which the defendant’s subsequent identification of them as mobile-phone suppliers or packaging providers must be assessed. In the absence of reliable contemporaneous material connecting the relevant payments with the purposes attributed to them by the defendant, I am unable to place reliance on his classifications. 307.Nor do I regard the counterparty lists, merely because they contain names associated by the defendant with particular categories of business transaction, as establishing the underlying purpose of the payments. Viewed together with the inconsistent classifications and the information contained in the bank records, they do not provide reliable support for his explanation that the relevant transfers and withdrawals arose from legitimate mobile-phone trading or packaging expenses. N.1.9 Reliability of the defendant’s Explanations Concerning Bar-Related Expenditure 308.The defendant accepted that approximately 25% of the activity in the HSB account related to expenditure at bars, including Volar and China Bar. He sought to explain such expenditure variously as customer entertainment, personal expenditure, or expenditure incurred by Latif using his card. He further maintained that some of the sums were subsequently reimbursed by friends or suppliers. 309.PW3’s analysis, however, identified substantial and repeated payments to Volar and China Bar through the HSB and BOC accounts. The defendant was unable to identify particular deposits representing the reimbursements he claimed to have received, or the persons from whom such reimbursements had come. His explanation remained general and was not supported by the banking records upon which he relied. 310.There is a further inconsistency with his account in VRI‑1, where he estimated his monthly expenditure at approximately HK$14,000 to HK$15,000[171]. That estimate is difficult to reconcile with the scale and frequency of the bar-related expenditure identified in the bank records. Nor did the defendant provide a coherent explanation as to how such expenditure was to be distinguished between his own personal spending, business entertainment, expenditure incurred by Latif, and expenditure said to have been subsequently reimbursed. N.1.10 Closing Balances of the defendant’s Accounts 311.The closing balances of the defendant’s three accounts provide further context in assessing his explanation for the substantial fund flows through them. During the charge periods, more than HK$24 million passed through the three accounts. Yet when the BOC account was closed on 10 September 2016, its balance was only HK$65,046.70. The HSBC account had a balance of HK$5.89 on 13 November 2017, while the HSB account had a balance of HK$26,931.66 on 9 November 2017. The low closing balances are not, of themselves, determinative of the nature or source of the funds passing through the accounts. They are, however, consistent with the broader pattern disclosed by the banking records of substantial sums entering the accounts and being withdrawn or transferred out, with little accumulation of funds. 312.Having considered the matters set out above cumulatively, together with the evidence as a whole and the submissions of both parties, I find the defendant’s evidence concerning the source, nature and movement of the funds through his three accounts to be wholly unreliable. His explanations were materially inconsistent, shifted over time, and in significant respects were inconsistent with the contemporaneous documentary and banking records. Having considered his two VRIs as a whole, including both their inculpatory and exculpatory parts, I accept the inculpatory parts insofar as they are consistent with the other evidence which I accept. I do not accept the exculpatory parts insofar as they seek to attribute the substantial fund flows to the mobile-phone, accessories and gemstone businesses relied upon by the defendant. 313.Even if the defendant engaged in some mobile-phone, accessories or gemstone transactions, that does not establish that the substantial fund flows through the three accounts were derived from, or connected with, those activities. The defence relies, among other things, on 23 invoices in support of those alleged business activities. The authenticity, credibility and reliability of those invoices, will be considered separately below. Having considered the scale and pattern of the transactions and the evidence as a whole, I am not satisfied that those business activities provide a credible explanation for the source and movement of the funds forming the subject of the charges. N.2 Assessment of the defence Witnesses’ Evidence 314.I turn next to the evidence of the defence witnesses. Their evidence must be assessed against the contemporaneous documents and objective financial records, as well as for its internal consistency and its consistency with the other evidence. I have considered the evidence of each witness on its own merits and in the context of the evidence as a whole. 315.I deal first with DW3 to DW7, whose evidence was relied upon in support of various aspects of the defendant’s account concerning his alleged business activities and the source or purpose of funds passing through his accounts. I shall consider each witness in turn. 316.The expert evidence of PW3 and LFT (DW2), which raises distinct questions of methodology and financial analysis, will be considered separately. N.2.1 Suppliers: Quality Telecom (DW3) and Kowloon and Attock Trading (DW4) 317.DW3 and DW4 were called in relation to the alleged supply of second-hand mobile phones to the defendant. The defence relied upon invoices said to have been issued by their respective businesses. Those invoices, however, were produced by the defendant rather than from the records retained by DW3 or DW4. Neither witness produced corresponding copies from his own business records or other contemporaneous business records independently documenting the transactions. This is a relevant consideration in assessing the evidential weight of their evidence and of the invoices upon which the defence relied. 318.I consider the evidence of DW3 and DW4 separately below. N.2.1.1 DW3 - Mohammad Nisar 319.DW3 operated Quality Telecom as part of a partnership. He accepted that he joined the partnership in June 2010, left in March 2016 and rejoined only in July 2017. Some of the five invoices relied upon by the defence therefore related to a period when DW3 was not involved in the business. He accepted that he had not issued those invoices, had not witnessed the underlying transactions, and that his knowledge of them was derived from what the other partners had told him. His evidence concerning those transactions was therefore not based on personal knowledge and carries limited weight. 320.DW3 produced no contemporaneous records from Quality Telecom independently documenting the alleged dealings. He said that most invoices were handwritten, that some records were missing, and that the business kept no ledgers or books of prime or final entry. He was unable to produce corresponding business records for the transactions relied upon by the defence. His estimate of the total sales to the defendant ranged from approximately HK$1.2 million to HK$3 million, notwithstanding the absence of records from which those figures could be verified. I therefore attach little weight to that estimate. 321.There are also difficulties with the invoices themselves. DW3 said that most invoices issued by Quality Telecom were handwritten. Of the five invoices relied upon by the defence, however, only one was handwritten, while the other four were computer-printed. More significantly, the invoice dated 27 July 2016 contains several apparent arithmetical inconsistencies[172]. For example, the quantities and unit prices shown for the Samsung Galaxy Ace 3, Nokia Asha 210 and Nokia 106 do not correspond with the respective amounts stated on the invoice. 322.There were also six deposits from Quality Telecom into the defendant’s account. DW3 gave differing explanations for them, referring at various points to personal loans to the defendant and payments for accessories purchased from him, ultimately saying that they were “mostly” payments for accessories. No contemporaneous records were produced identifying the particular deposits as payments for accessories or otherwise substantiating the transactions described by DW3. 323.For these reasons, I do not regard DW3’s evidence as providing reliable independent support for the mobile-phone dealings alleged by the defendant, whether as to their nature, scale or aggregate value. Nor does his evidence reliably authenticate the invoices relied upon by the defence. N.2.1.2 DW4 - Khan Sharafat 324.DW4 stated that he operated Kowloon & Attock Trading Company as a sole proprietor and sold second-hand mobile phones to the defendant. He identified the four invoices produced by the defence as genuine. He accepted, however, that he had neither prepared nor signed them, had not applied the company chop, and could not identify the person whose signature appeared on them. He said that the invoices had been prepared, signed and stamped individually by his staff. 325.I find a significant difficulty with that evidence. The company chop and signature appearing on the four invoices are positioned in substantially the same manner on each document. That degree of uniformity is difficult to reconcile with DW4’s evidence that each invoice had been separately and manually signed and stamped by staff at the time of issue. When this was put to him in cross-examination, DW4 maintained that there were slight differences between the documents but was unable satisfactorily to explain the striking similarity. This materially diminishes the weight I am prepared to attach both to his purported authentication of the invoices and to the invoices themselves. 326.The difficulty is compounded by the fact that DW4, although the sole proprietor of Kowloon & Attock Trading, could not identify who had prepared or signed the invoices. Nor did he retain corresponding copies or produce contemporaneous business records from which the underlying transactions could independently be verified. In those circumstances, his assertion that the four invoices were genuine does not, in my view, provide reliable independent authentication of them. 327.DW4 also said that most transactions with the defendant passed through his personal bank accounts, including after the company opened a business account in 2013. I do not regard the use of a personal account, by itself, as inconsistent with the existence of business transactions. However, DW4 was unable to provide a clear explanation for the manner in which payments relating to the alleged business were divided between his personal and business accounts. This added to the difficulty in identifying the nature and purpose of the particular transactions relied upon by the defence. 328.A further issue arose concerning the Nokia Asha 210. DW4 was cross-examined on material indicating an expected retail price of approximately US$72 when that model was released, whereas the invoices relied upon by the defence recorded purported sales of second-hand units at HK$700 each. He sought to explain the difference by reference to matters including regional availability and customer demand. I do not consider it necessary to determine, on this evidence alone, what the appropriate market price of the model would have been at the relevant times. The discrepancy nevertheless remains a matter which, together with the other difficulties concerning the invoices, affects the weight I am prepared to attach to them. 329.More generally, DW4 produced no contemporaneous business records from Kowloon & Attock capable of independently substantiating the transactions recorded in the four invoices. His evidence that the defendant was both a purchaser of second-hand mobile phones and a supplier of accessories was likewise unsupported by corresponding business records identifying the transactions concerned. 330.For these reasons, I do not regard DW4’s evidence as providing reliable independent support for the mobile-phone dealings alleged by the defendant, whether as to their nature, scale or aggregate value. Nor, for the reasons given above, do I regard his evidence as providing reliable independent authentication of the four invoices relied upon by the defence. N.2.2 The “Three Big Buyers”: DW5, DW6 and DW7 331.DW5 (Qazi Shahah Uddin), DW6 (Khan Shuhab) and DW7 (Khan Sayad) were called in support of the defendant’s evidence concerning substantial purchases of second-hand mobile phones. Two common features of their evidence are significant. First, none produced contemporaneous documents independently recording the purchases alleged. Second, each gave an approximate aggregate value for his purchases which corresponded with the figure attributed to him in the material provided by the defendant to LFT. 332.The respective estimates were:
333.In the absence of contemporaneous records from which those figures could independently be verified, the correspondence between their estimates and the figures previously provided by the defendant is a relevant consideration when assessing the weight to be attached to their evidence. I shall consider the evidential basis for each estimate below. 334.I turn first to DW5. N.2.2.1 DW5 - Qazi Shahah Uddin 335.DW5 said that he was a full-time construction worker who, between 2012 and 2014, assisted his cousin in Dubai by purchasing second-hand mobile phones from the defendant. He did not operate a mobile-phone business himself and said that he received no profit from the transactions. He produced no invoices, receipts, Western Union records, cargo documents or communications recording the alleged dealings. 336.DW5 estimated that the total purchases amounted to around HK$500,000 over the three-year period. He accepted that this figure was not derived from contemporaneous records and that he had provided the approximate total when subsequently asked by the defendant. I therefore regard the figure of HK$500,000 as an estimate based on recollection rather than an amount independently established by documentary or financial records. 337.DW5 said that funds were received from his cousin through Western Union and deposited into the defendant’s BOC account, sometimes by DW5 himself and sometimes through friends. However, he was unable to identify the particular deposits said to relate to those purchases, and no Western Union receipts, deposit slips or other records were produced linking the relevant payments to the mobile-phone transactions alleged. 338.DW5 also described purchases occurring three or four times per month, involving approximately 5 to 15 phones on each occasion at prices ranging from HK$200 to HK$1,000. His evidence therefore described a regular course of dealings over a substantial period. Yet there is no contemporaneous documentary material independently recording those dealings or from which their aggregate value can be verified. 339.For these reasons, I do not regard DW5’s evidence as reliable support for the mobile-phone dealings alleged by the defendant, whether as to their nature, scale or aggregate value. N.2.2.2 DW6 – Khan Shuhab 340.DW6 said that he operated a garment business known as Al Miraj International in Chungking Mansions and had sublet a counter to an Indian tenant whom he believed was named “Mr Singh”. He claimed that between 2012 and 2015 he purchased second-hand mobile phones from the defendant on behalf of that tenant, without receiving any commission or other benefit. 341.DW6 described an arrangement whereby the defendant delivered phones to him, he checked them, received or held the tenant’s cash and paid the defendant, notwithstanding that the tenant was himself present at the counter. DW6 said that this arrangement continued for several years while he operated his own garment business. No tenancy agreement, invoices, receipts or other contemporaneous business records were produced to document the arrangement. 342.More importantly, DW6’s estimate of approximately HK$1 million was not derived from contemporaneous records. As emerged from his evidence, depending upon the quantities and prices used in the calculation, the value of the alleged transactions could range from approximately HK$216,000 to HK$1,008,000. His figure of around HK$1 million therefore represented an estimate at the upper end of the possible range rather than an amount independently established by the underlying records. 343.This is consistent with the difficulty already identified in relation to the bank records. The identified transactions did not independently substantiate mobile-phone purchases approaching the scale alleged by DW6. His evidence concerning gemstone dealings was likewise unsupported by contemporaneous records. 344.For these reasons, I do not regard DW6’s evidence as reliable support for the mobile-phone dealings alleged by the defendant, whether as to their nature, scale or aggregate value. N.2.2.3 DW7 - Khan Sayad 345.DW7 said that between 2012 and 2016 he worked full-time as a site engineer and purchased second-hand mobile phones from the defendant on behalf of a friend in Pakistan, Mohammad Rafiq, who traded mobile phones there. DW7 said that he received no commission or profit from the arrangement. He produced no invoices, receipts, cargo documents, money-transfer records or communications recording the alleged dealings. 346.DW7 estimated that his purchases amounted to around HK$2 million. That figure was based on his recollection rather than contemporaneous records. He also said that, when he was unable to make payments himself, his wife or friends would deposit money into the defendant’s account. He was unable, however, to identify with any precision the frequency or amounts of such deposits. 347.DW7 described phones being carried to Pakistan in the luggage of passengers travelling from Hong Kong, sometimes in quantities of up to 25 phones, with funds also being brought to Hong Kong in cash. Whatever the precise arrangements may have been, no contemporaneous records were produced from which either the frequency, value or aggregate amount of those transactions could independently be verified. 348.For these reasons, I do not regard DW7’s evidence as reliable support for the mobile-phone dealings alleged by the defendant, whether as to their nature, scale or aggregate value. N.3 Extent to Which the Defendant’s Explanations Account for the Fund Flows 349.Having assessed the defendant’s evidence and that of the defence witnesses, I turn to the extent to which the documentary material and transaction analyses relied upon by the defence are capable of accounting for the substantial fund flows through the defendant’s accounts. N.3.1 Deposits 350.The defendant maintained that substantial deposits into his accounts represented proceeds of his mobile-phone, accessories and gemstone businesses. 351.The primary documents relied upon in support of deposits into the HSBC account consisted principally of cash memos totalling HK$559,135[173] and Asia Smart invoices totalling HK$1,389,392[174]. Those documents relate to approximately HK$1.9 million, compared with total deposits of HK$15,696,233 into the HSBC account, representing approximately 12% of the total deposits[175]. Thus, quite apart from the questions concerning the reliability and provenance of those documents already addressed above, they account for only a relatively small proportion of the deposits into that account. N.3.2 Withdrawals 352.The defence also relied upon 23 invoices said to relate to purchases of mobile phones, with an aggregate value of HK$6,306,400. I have already addressed above the issues concerning those invoices and do not repeat them here. 353.The significance for present purposes is quantitative. The 23 invoices have an aggregate face value of HK$6,306,400, compared with total withdrawals of HK$25,096,427 from the BOC account, representing approximately 25% of those withdrawals. They therefore account for only a limited proportion of the withdrawals from that account. N.3.3 MFI-14 354.The defendant also relied upon MFI-14 to categorise transactions through his HSBC account. The deposit categories identified in those tables total HK$6,262,417, compared with total deposits of HK$15,696,233. The withdrawal categories total HK$2,294,637, compared with total withdrawals of HK$15,233,580. These tables therefore account for only part of the overall movement of funds through the account. 355.More importantly, MFI-14 represents the defendant’s classification of the transactions. The fact that a particular transaction is placed within a category such as mobile-phone sales or business expenditure does not, without reliable supporting evidence, establish the underlying nature or purpose of that transaction. I therefore do not regard the tables themselves as independent substantiation of the defendant’s explanations. N.4 Assessment of Expert Evidence and Analysis of AC01–AC03 356.Having considered the expert evidence as a whole, I accept PW3’s analysis of AC01 to AC03. His approach was clear, structured and methodical, and was consistently grounded in the underlying bank records, IRD documents, company records and customer information forms. Where the available material did not permit a conclusion to be drawn, he identified the limitation rather than speculate. His evidence remained consistent under cross-examination, and he was able to identify the source materials upon which his analysis was based. 357.PW3’s consolidated analysis showed Adjusted Total Deposits of HK$24,934,619.26, approximately 38.1 times the defendant’s identifiable IRD income of HK$654,157. The analysis also identified substantial cash activity, comprising 1,002 cash deposits totalling approximately HK$11.7 million and 1,238 cash withdrawals totalling approximately HK$14.1 million. Save for a limited number of vouchers containing brief descriptions, the available bank documents did not identify the sources of the cash deposits, the beneficiaries of the cash withdrawals, or the purposes for which those transactions were made[176]. 358.PW3’s analysis further showed that, after excluding inter-account transfers, net deposits amounted to HK$25,036,986.49 and net withdrawals to HK$25,096,427.43. The defendant was the sole authorized signatory of all three accounts during the examined period. I take these matters into account as part of the overall pattern of financial activity disclosed by the bank records. 359.The consolidated funds-flow analysis showed that, during the examined period from 1 March 2012 to 13 November 2017:
PW3 also identified AC02 as the principal account, accounting for 62.5% of net deposits and 62.4% of net withdrawals. 360.Turning to LFT (DW2), I accept that he approached his task candidly and did not seek to go beyond the material available to him. Importantly, however, he acknowledged significant limitations in that material. He had no sales invoices, purchase orders, receipts, books of prime entry, ledgers, management accounts or other records capable of presenting a complete picture of the defendant’s fund flows. He also accepted that, save where the bank records themselves identified a counterparty, he was unable independently to verify the nature or purpose of individual transactions. 361.Those limitations are important because significant parts of LFT’s analysis necessarily depended upon information or classifications provided by the defendant rather than upon independently verifiable contemporaneous records. I therefore attach limited weight to LFT’s analysis insofar as it is relied upon to establish the underlying nature or purpose of the transactions or to attribute the substantial fund flows to the business activities alleged by the defendant. 362.I turn next to the 23 purchase invoices relied upon in LFT’s report. I have already considered above the issues concerning the Quality Telecom and Kowloon & Attock Trading invoices and do not repeat them here. There were, however, further difficulties concerning two invoices said to have been issued by Sun Star HK International. In Exhibit D36(11) (LFT/46), dated 2 July 2014, 600 Samsung Galaxy Y Pro Duos units were stated at HK$800 each, which would yield HK$480,000, whereas the amount recorded was HK$220,000. In Exhibit D36(13) (LFT/50), dated 5 March 2015, 420 units at HK$800 each correctly yielded HK$336,000, but the invoice displayed two different totals, including HK$396,000[177]. These discrepancies materially affect the reliability of those invoices as records of the transactions which they purport to evidence. 363.More generally, the available material did not establish a reliable connection between the 23 invoices, the suppliers identified in them, and the particular withdrawals which they were said to explain. PW3 further noted that the relationship between the 23 invoices and the 42 ATM withdrawals to eight bank accounts could not be established from the available documents[178]. 364.Having independently considered the bank records, IRD records, the defendant’s explanations and the expert evidence, I accept PW3’s consolidated analysis of the financial activity in AC01 to AC03. I am satisfied that his analysis provides a reliable account of the transactions disclosed by the underlying records. O. VERDICTS 365.I have made due allowance for the passage of time, the inevitable fading of memory, and the possibility that some records may no longer be available. Those considerations do not, however, satisfactorily account for the material inconsistencies and contradictions identified above. The defendant’s explanations on matters central to the case shifted over time and, in significant respects, were inconsistent with the contemporaneous documentary and banking records. For the reasons already given, I do not accept his evidence insofar as he relied upon his alleged mobile-phone, accessories and gemstone businesses as an explanation for the substantial fund flows through his three bank accounts. 366.I am fully mindful that the rejection of the defendant’s evidence does not, of itself, establish his guilt. The burden remains throughout on the prosecution to prove the charge against him beyond reasonable doubt. I therefore turn to consider whether, upon the evidence which I accept and the reasonable inferences to be drawn from it, the prosecution has established the necessary elements of the offence to that standard. 367.The Court of Appeal in HKSAR v Lau Sui Hing (劉瑞卿) CACC 111/2008 emphasised that a bank account is a significant personal asset, and also said in paragraphs 64 and 65 that:-
368.As the Court of Appeal observed in HKSAR v Wong Chor Wo & another, CACC 314/2006 at paragraph 108:-
O.1 Charge 1 - Conspiracy with Latif (BOC Account) 369.I find the following facts and circumstances, among others:
370.I also accept PW3’s analysis of the BOC account during the examined period from 1 March 2012 to 10 September 2016. It showed that:
371.I accept the breakdown of the amount particularized in Charge 1 as set out in MFI-31. After deducting the deposits from employers supported by IRD records (HK$179,496), the correction item (HK$32,644) and odd cents (HK$0.01), the amount attributable to Charge 1 is HK$8,688,661.18. 372.Taken together, these matters satisfy me beyond reasonable doubt that the defendant and Latif agreed and intended that Latif would use the defendant’s BOC account and ATM card to deal with funds passing through the account. The defendant voluntarily provided Latif with his ATM card and permitted him to use it over an extended period, including while the defendant was overseas. 373.I am satisfied beyond reasonable doubt that the defendant knew the material facts and circumstances identified above, including the substantial sums passing through his account, the repeated cash deposits and withdrawals, Latif’s use of his ATM card, and the scale of the transactions relative to his income. Considering those matters cumulatively, I am satisfied that a reasonable person possessing the same knowledge would have been bound to believe that the funds to be dealt with pursuant to the agreement represented, in whole or in part and directly or indirectly, the proceeds of an indictable offence. I therefore find that the defendant had reasonable grounds so to believe. 374.I am accordingly satisfied beyond reasonable doubt that the defendant and Latif agreed and intended to deal with the funds in the manner described, and that the defendant had reasonable grounds to believe that those funds were, and would remain, tainted. The agreed course of conduct, if carried out in accordance with their intentions, would necessarily involve the commission of an offence under section 25(1) of OSCO. The prosecution has proved all the elements of Charge 1 beyond reasonable doubt, and I find the defendant guilty of this charge. O.2 Charge 2 - Dealing with an Unknown Person (HSBC Account) 375.I find the following facts and circumstances, among others:
376.I also find that, during the examined period from 16 March 2011 to 13 November 2017:
377.I accept the breakdown of the amount particularized in Charge 2 as set out in MFI-31. After deducting deposits from AC03 (HK$42,535), deposits from employers supported by IRD records (HK$348,554.90), deposits from employers not supported by IRD records but believed to be genuine (HK$123,303.35), and unsuccessful transactions (HK$69,587.10), the amount attributable to Charge 2 is HK$15,112,253.23. 378.Taken together, these matters satisfy me beyond reasonable doubt that the defendant dealt with the funds in the HSBC account during the charge period and permitted another person to operate the account using his ATM card and PIN. I am also satisfied that the defendant knew the material facts and circumstances identified above, including the substantial sums passing through his account, the repeated cash deposits and withdrawals, the scale of the transactions relative to his income, and the operation of the account by another person while he was outside Hong Kong. 379.Applying the test set out above and considering those facts and circumstances cumulatively, I am satisfied beyond reasonable doubt that a reasonable person possessing the same knowledge as the defendant would have been bound to believe that the funds, in whole or in part and directly or indirectly, represented the proceeds of an indictable offence. I therefore find that the defendant had reasonable grounds so to believe. 380.I am satisfied that the prosecution has proved all the elements of Charge 2 beyond reasonable doubt. I therefore find the defendant guilty of this charge. O.3 Charge 3 - Dealing personally (HSB Account) 381.I find the following facts and circumstances, among others:
382.I also find that, during the examined period from 9 May 2017 to 9 November 2017:
383.I accept the breakdown of the amount particularized in Charge 3 as set out in MFI-31. After deducting the HK$20,000 deposit from AC02 from the total deposits of HK$502,486.72, the amount attributable to Charge 3 is HK$482,486.72. 384.Taken together, these matters satisfy me beyond reasonable doubt that the defendant personally dealt with the funds in the HSB account and knew the material facts and circumstances identified above, including the substantial turnover in the account, the repeated cash deposits and withdrawals, the scale of the transactions relative to his income, and the nature and extent of his own financial and business circumstances. 385.Applying the test set out above and considering those facts and circumstances cumulatively, I am satisfied beyond reasonable doubt that a reasonable person possessing the same knowledge as the defendant would have been bound to believe that the funds, in whole or in part and directly or indirectly, represented the proceeds of an indictable offence. I therefore find that the defendant had reasonable grounds so to believe. 386.I am satisfied that the prosecution has proved all the elements of Charge 3 beyond reasonable doubt. I therefore find the defendant guilty of this charge. P. POSTSCRIPT 387.After I had delivered my verdicts, the prosecution informed the Court that the defendant had a previous conviction for possession of a dangerous drug dated 15 March 2018. 388.I note, however, that the conviction post-dated the periods covered by all three charges. The defendant therefore had no previous conviction during the relevant periods. This was a matter which ought to have been brought to my attention before the delivery of the verdicts and properly reflected in the admitted facts. The parties now agree that the admitted facts did not record the defendant’s then clear record. 389.I have therefore reconsidered the evidence as a whole, giving the defendant the benefit of his clear record during the relevant periods. Having done so, I remain satisfied beyond reasonable doubt that the prosecution has proved each of the three charges. My verdicts accordingly remain unchanged.
Annexure Ruling on the Application for a Permanent Stay of Proceedings The Application 1. The defendant’s application for a permanent stay of proceedings was heard on 11 March 2026. The defence relied on written skeleton submissions and two affirmations affirmed by the defendant. The defendant did not give oral evidence at the hearing. 2. The defence relies on six grounds in support of the application for a permanent stay of proceedings in DCCC 753/2022 and/or DCCC 187/2025. I do not propose to rehearse the submissions in full. The six grounds may be summarized as follows:
3. Reliance is also placed on Article 87 of the Basic Law and Article 11(2)(c) of the Hong Kong Bill of Rights, which guarantee the right to trial without undue delay, and on Article 10 of the Hong Kong Bill of Rights, which guarantees the right to a fair hearing. Chronology 4. Before turning to the Grounds, I set out the relevant chronology, which is largely undisputed. The investigation began in December 2015 following the seizure of the defendant’s Bank of China ATM card from Farrukh Latif. Between 2016 and 2018, the Police obtained bank, CCTV and tax records and conducted fund-flow analysis. 5. The defendant was first arrested in January 2019 in connection with the BOC account. He was interviewed under caution on 24 January 2019 (“VRI-1”) and was subsequently charged in June 2022 with the conspiracy offence now forming Charge 1 in DCCC 753/2022. A trial was initially fixed for 10 to 18 January 2024, with the defendant represented by Ms Sujanani Bina Dayaram, instructed by Kevin Ng & Co. Owing to the illness of the trial judge on 10 January 2024, the trial could not proceed and was refixed for 28 May to 5 June 2024. 6. The trial commenced in May 2024, with the defendant represented by the same counsel and solicitors. During his cross-examination, issues arose concerning interpretation when the Urdu interpreter twice informed the Court that the defendant’s native language was Pushto. Following confirmation with the defendant, the defence applied for a trial de novo. The application was granted by Deputy Judge F Cheng, and fresh trial dates were fixed for 13 to 30 May 2025. 7. While the case was awaiting retrial, the Police conducted further enquiries into the defendant’s HSBC and HSB accounts, which subsequently formed Charges 2 and 3. The defendant was interviewed under caution concerning those accounts on 19 November 2024 (“VRI-2”). Further legal advice was sought in January 2025, following which the defendant was charged in respect of those accounts in DCCC 187/2025. The prosecution thereafter applied to consolidate DCCC 187/2025 with DCCC 753/2022. The application was heard before me on 25 March 2025. 8. At the consolidation hearing, Mr Newman Wong, then appearing for the defendant and instructed by Kevin Ng & Co, did not oppose consolidation but sought additional time to prepare for the two new charges. He indicated that the defence would not be ready for trial in May 2025 and applied for an adjournment. The prosecution did not object. I granted the adjournment, vacated the trial dates of 13 to 30 May 2025, and the consolidated trial was ultimately fixed before me for 18 March to 14 April 2026. A pre-trial review was subsequently fixed for 10 February 2026. The defendant’s Affirmations 9. In his affirmation dated 5 March 2026 and his supplementary affirmation, the defendant states that the investigation began in 2015 after his Bank of China ATM card was seized from a friend. He was arrested in January 2019, when he informed the Police that he also held accounts with HSBC, Hang Seng Bank, ICBC and Standard Chartered Bank. He left Hong Kong in May 2021 while on Police bail and returned in June 2022, when he was arrested for failing to report bail and charged with the Bank of China-related offence. The first trial in 2024 was subsequently aborted because of concerns over interpretation. 10. The defendant complains that, although the Police had known of his HSBC and Hang Seng Bank accounts since January 2019, Charges 2 and 3 were not brought until January 2025. He says that the transactions concerned occurred many years ago and that, through the passage of time and several changes of residence, business records including invoices, purchase orders and ledgers have been lost, his memory has faded, companies have ceased to exist, and purchasers and suppliers can no longer be located. He maintains that those records and persons would have supported his account of his gemstone, mobile-phone and accessories businesses. 11. The defendant further alleges that the Police acted oppressively in requiring him to attend VRI-2 in November 2024, which he says he attended involuntarily because of threats of arrest and refusal of bail. He contends that the subsequent laying of Charges 2 and 3 was punitive and oppressive and that, taken together with the delay and resulting loss of evidence, the circumstances have rendered a fair trial impossible. The prosecution disputes those assertions and submits that no serious or irremediable prejudice, oppression or abuse of process has been established. Principles on Stay Applications 12. The principles governing permanent stay applications are well established. A stay may be granted in two categories of cases:
13. Of particular relevance is the following statement from Archbold summarizing the effect of the relevant authorities: “Where an application for stay the proceeding is made on the ground of undue delay, the accused has the burden of proof on balance of probabilities: HKSAR v Lee Ming-tee [2001] 1 HKLRD 598. The accused must demonstrate that he has been or will be seriously prejudiced in the preparation or conduct of his evidence by the unjustifiable delay of the prosecution in bringing the proceedings: Att-gen v Cheung Wai-bun [1993] 1 HKCLR 249. The burden never shifts to the prosecution: Tan Soon-gin v Judge Cameron [1992] 1 HKLR 149. There must be a proper factual basis to support such an application: HKSAR v Lau Kwok-ching (CACC 411/1997).” 14. From the defence’s skeleton submissions, it is apparent that the defendant relies on both categories of stay applications. My Analysis and Decision 15. I have considered the defence submissions in full, together with the authorities and principles relied upon. Ground (a), (b) and (c) - Delay and Fair Trial 16. I deal first with Grounds (a) to (c), which concern delay and its alleged effect on the defendant’s ability to receive a fair trial. 17. The defence submits that the investigative and prosecutorial delays in respect of all three charges were substantial and inordinate, giving rise to a presumption of prejudice. It relies, in particular, on the passage of time, the complexity of the charges, faded memory, missing documents and unavailable witnesses, together with the stress and anxiety caused by the outstanding proceedings. It contends that the delays were unjustified and attributable to the prosecution. 18. The prosecution disputes that there was any unjustifiable delay and, in any event, submits that no actual or irremediable prejudice has been established. It relies on the nature and complexity of the investigation, the defendant’s absence from Hong Kong between May 2021 and June 2022, his ability to prepare for and conduct the first trial, and the absence of satisfactory evidence that material documents or witnesses previously available to him have since become unavailable because of prosecutorial delay. 19. I accept that the periods involved are substantial. That, however, is not determinative. The essential question is whether the passage of time has caused such prejudice to the defendant that a fair trial can no longer be achieved. I am not satisfied that it has. 20. The defendant’s complaints concerning faded memory, missing business records and unavailable purchasers and suppliers are expressed largely in general terms. They do not satisfactorily identify what material evidence has been lost, when it became unavailable, or how its loss is attributable to the delay complained of. Importantly, the defendant was able to prepare for and conduct his defence at the first trial. The evidence before me does not establish that any material evidence then available to him has since been lost so as to render the present trial unfair. 21. The procedural history must also be considered. The trial fixed for January 2024 could not proceed because of the trial judge’s illness. The May 2024 trial was subsequently aborted because of interpretation difficulties which arose during the defendant’s evidence, resulting in an order for a trial de novo. Neither circumstance constitutes prosecutorial delay. The defendant was also absent from Hong Kong while on Police bail between May 2021 and June 2022. Further, when Charges 2 and 3 were added and consolidation was sought, the defence itself applied for additional time to prepare, which resulted in the May 2025 trial dates being vacated. 22. Viewing the history as a whole, I am not satisfied that the periods of delay, substantial though they were, have caused prejudice which cannot adequately be addressed at trial. Nor am I satisfied that the defendant has been deprived of a fair opportunity to meet the charges against him. 23. Accordingly, whether the delays are considered individually or cumulatively, I am not satisfied that they warrant a permanent stay of the proceedings. Grounds (a), (b) and (c) are rejected. Ground (d) - Conduct of the Investigative Authorities 24. Ground (d) concerns the defence allegation that the circumstances in which VRI-2 was arranged and conducted were unfair and oppressive and amounted to an abuse of process. The defence submits that, by then, the defendant had already disclosed his defence and been cross-examined at the first trial, and that the Police had known from VRI-1 of his HSBC and HSB accounts. It contends that VRI-2 was conducted to strengthen the prosecution’s case in relation to Charges 2 and 3. The prosecution disputes those allegations and maintains that VRI-2 was a proper investigative step taken in connection with the investigation of the additional charges. 25. At the hearing of the stay application, the defence relied only on counters 670–676 and 751–758 of VRI-1. Even on those extracts, I was not satisfied that the defendant had stated that he held the HSBC or HSB bank accounts subsequently forming the subject of Charges 2 and 3. The material therefore did not support the contention that the Police had already been informed of those accounts in January 2019 but simply failed to investigate them. 26. For completeness, the fuller passage of VRI-1 subsequently available at trial, counters 668–714, confirmed that the defendant was referring to an HSBC account which he said had already been closed, and that he stated that he then maintained only the BOC and Standard Chartered accounts. The reference at counters 751–758 was to HSBC and Hang Seng credit cards, not bank accounts. This fuller material does not alter, but rather accords with, the conclusion I reached on the material available at the stay hearing. 27. As to the allegation that the defendant was compelled to attend VRI-2, I do not consider it necessary or appropriate, for the purposes of the stay application, to determine whether VRI-2 was voluntary or admissible. Those are matters which may be determined at trial. What matters for present purposes is that the Police were investigating additional charges concerning different bank accounts. I am not satisfied that conducting a further interview in those circumstances, or the matters relied upon by the defence concerning that interview, established oppression or an abuse of process warranting a permanent stay. 28. Nor is there an evidential basis upon which I could conclude that VRI-2 was conducted for the purpose of “patching up” weaknesses in the prosecution case. That contention is speculative. Ground (d) is therefore rejected. Ground (e) – The Retrial of the defendant 29. Ground (e) concerns the defence submission that the retrial is unfair and oppressive because the defendant had already disclosed his defence and been cross-examined at the first trial, following which the Police conducted VRI-2 and the prosecution obtained further expert evidence. It is submitted that this gave the prosecution an unfair “forensic advantage” and rendered the retrial an abuse of process. The prosecution disputes that contention and submits that further investigation and preparation following an aborted trial do not, without more, render a retrial unfair. 30. I am not satisfied that the fact that the defendant had disclosed his defence and been cross-examined at the first trial renders the retrial unfair or oppressive. The first trial was aborted following interpretation difficulties which arose during the defendant’s evidence, and a trial de novo was ordered. The fact that the prosecution thereafter conducted further investigations or obtained additional evidence does not, of itself, establish an abuse of process. 31. Nor am I satisfied that the engagement of a forensic accountant and the subsequent preparation of an expert report gave the prosecution an unfair forensic advantage of the kind alleged. The fact that further evidence may strengthen the prosecution case, or challenge the defendant’s intended explanation, does not of itself render the retrial unfair. The defendant remains able to challenge and respond to that evidence at trial. 32. The defence further submits that the additional expert evidence has significantly reduced the defendant’s prospects of acquittal and may “tip the balance” against him. That does not establish prejudice warranting a permanent stay. The relevant question is not whether the prosecution case has become stronger, but whether the circumstances have deprived the defendant of a fair trial or otherwise rendered the continuation of the proceedings an abuse of process. I am not satisfied that either has been established. 33. Accordingly, I am not satisfied that the retrial is unfair or oppressive, or that any forensic advantage obtained by the prosecution warrants a permanent stay. Ground (e) is therefore rejected.
Ground (f) – Preferring additional charges against the defendant
34. Ground (f) concerns the defence submission that the prosecution acted oppressively by preferring Charge 1 in DCCC 753/2022 and only subsequently preferring Charges 2 and 3 in DCCC 187/2025, notwithstanding that it was said to have been aware of the facts underlying all three charges when the proceedings were first instituted. Relying on Rule 7 of the Indictment Rules and Connelly v DPP [1964] AC 1254, the defence submits that the prosecution improperly “kept in reserve” Charges 2 and 3, thereby fragmenting the proceedings, obtaining a forensic advantage and prejudicing the defendant’s right to a fair trial. 35. The prosecution submits that Charges 2 and 3 arose from matters which came to the attention of the police during the defendant’s evidence at the first trial and which warranted further investigation. It further relies on the fact that the defendant did not oppose the subsequent consolidation of the three charges, and submits that no forensic disadvantage or other prejudice resulting from the timing of Charges 2 and 3 has been identified. 36. I do not accept that the subsequent preferring of Charges 2 and 3 was oppressive or amounted to an abuse of process. Rule 7 permits charges to be joined in the same indictment in the circumstances specified by the Rule. It does not, in itself, support the proposition that all possible charges must necessarily be preferred at the commencement of the proceedings or that the subsequent preferring of additional charges is, without more, oppressive. 37. More importantly, I do not accept the factual premise that the prosecution deliberately “kept in reserve” Charges 2 and 3. On the evidence before me, the matters giving rise to further investigation of the defendant’s HSBC and HSB accounts emerged during his evidence at the first trial. There is no sufficient basis for finding that the prosecution deliberately withheld Charges 2 and 3 for tactical advantage or acted in bad faith. 38. Nor am I satisfied that the defendant has demonstrated any material prejudice arising from the timing of the additional charges. The three charges have since been consolidated and are being tried together. The defence has not identified any forensic disadvantage resulting from the later preferring of Charges 2 and 3, or any respect in which the defendant’s ability to meet the charges has been impaired so as to render a fair trial impossible. 39. In all the circumstances, I am not satisfied that the subsequent preferring of Charges 2 and 3 constituted an improper fragmentation of the proceedings or otherwise amounted to oppression or an abuse of process. Ground (f) is rejected. Ruling 40. A permanent stay is an exceptional remedy of last resort. Having considered the application as a whole, the defendant’s affirmations, the parties’ submissions and the applicable legal principles, I am not satisfied that any of the six grounds advanced warrants such a stay. 41. The defendant has not established that a fair trial is no longer possible, or that the continuation of the proceedings would amount to an abuse of process warranting a permanent stay. Accordingly, the application for a permanent stay of proceedings is refused. [1] Exhibit P68 [2] Exhibits P47, P48 and P86 [3] See Exhibits P1-P4 [4] Exhibits P23-P40 [5] The Business Registration Certificate was produced as Exhibit P41. [6] Exhibit P64 at §27 [7] Exhibits P5-P8 [8] Exhibits P57-P59 [9] Exhibits P60–P63, Exhibits P69–P71 [10] Exhibits P80 and P81 [11] Exhibits P83–P84, Exhibit P51C [12] Exhibit P65 [13] Exhibit P66 [14] Exhibit P49, its transcript marked as Exhibit P49B, and the certified English translation of Exhibit P49B marked as Exhibit P49C. [15] Exhibit P11 [16] See MFI-5 [17] See MFI-4 [18] Exhibit P67 [19] Exhibit P51, its transcript marked as Exhibit P51B, and the certified English translation of Exhibit P51B marked as Exhibit P51C. [20] Exhibits D1(1)–D1(3) [21] Exhibit D2 in which Rule III(b) and (c) deal with questions relating to the Offence that may be put to a suspect after he has been charged or informed that he may be prosecuted. The words “relating to the Offence” imply that questioning of the accused person about other matters, not related to that offence, is permitted. Questions relating to the Offence can be put only in exceptional cases and the questions must be necessary for the purpose of preventing or minimizing harm or loss to some other person or to the public or for clearing up an ambiguity in a previous answer or statement. [22] Exhibit P68, Consolidated Bundle 16 at pages 7596 to 7957 [23] Consolidated Bundle 16 at pages 7703 and 7704 [24] Consolidated Bundle 16 at pages 7705-7707 [25] Consolidation Bundle 16 at page 7619, §45 [26] Consolidated Bundle 16 at page 7621, §56 [27] Consolidation Bundle 16 at page 7625, §64 [28] Consolidation Bundle 16 at page 7628, §§71-74 [29] Consolidation Bundle 16 at page 7631, §85 [30] Consolidation Bundle 16 at page 7635, §93 [31] Consolidation Bundle 16 at page 7641, §111 [32] Consolidation Bundle 16 at page 7643, §115 [33] Consolidation Bundle 16 at page 7872 [34] Consolidation Bundle 16 at page 7683, §210 [35] Appendix 14 of Exhibit 68, Consolidated Bundle 16 at page 7876 [36] Consolidation Bundle 16 at page 7681, §205 [37] Appendix 14 of Exhibit 68, Consolidated Bundle 16, at pages 7910-7932 [38] Consolidated Bundle 16 at pages 7915, 7916, 7919 and 7932 [39] Appendix 14 of Exhibit 68, Consolidated Bundle 16, at pages 7876, 7920 and 7928 [40] Consolidated Bundle 16 at page 7682, §208 [41] Consolidated Bundle 16 at pages 7658, §§149-160 [42] Exhibit P65 [43] Exhibit D1(1)-(3) [44] Exhibit P49C, counters 34-56 [45] Exhibit P51C, counters 29-32 [46] Exhibit P49C, counters 668-714 [47] Exhibit P49C, counters 122-142, 157-165 [48] Exhibit P49C, counters 180-208 [49] Exhibit P49C, counters 216-218 [50] Exhibit P49C, counters 749-803 [51] Exhibit P49C, counters 369, 725-748 [52] Exhibit P49C, counters 763-769 [53] Exhibit P49C, counters 221-241 [54] Exhibit P49C, counters 268-274 [55] Exhibit P49C, counters 244–267, 287–288, 384–393, 339–341 [56] Exhibit P49C, counters 292-299 [57] Exhibit P49C, counters 1739–1837 [58] Exhibit P49C, counters 302-317 [59] Exhibit P49C, counters 396-458 [60] Exhibit P49C, counters 332, 343-348 [61] Exhibit P49C, counters 597-645 [62] Exhibit P49C, counters 646–667, 640, 658, 878 [63] Exhibit P49C, counters 646-667 [64] Exhibit P49C, counters 804-911 [65] Exhibit P49C, counters 804-911 [66] Exhibit P49C, counters 1083-1201 [67] Exhibit P49C, counters 1083-1201 [68] Exhibit P49C, counters 1686-1738 [69] Exhibit P51C, counter 146-168 [70] Exhibit P51C, counters 170-196 [71] Exhibit P51C, counters 197-235 [72] Exhibit P51C, counters 236-275 [73] Exhibit P51C, counters 284-344 [74] Exhibit P51, counters 442-484 [75] Exhibit P51C, counters 485-573 [76] Exhibit D29(1)-(16) [77] Exhibit D3 at page 5 [78] See Admitted Facts II, Exhibit P85 at §8 and Exhibit P80 [79] Exhibit D20(1)-(3) [80] Exhibit D33(1) to (21) [81] Exhibits P18 to P21, Consolidated Bundle 7 at pages 3381 to 3388 [82] Exhibits P44 to P45, Consolidated Bundle 7 at pages 3477 to 3484 [83] Exhibit P42A, Consolidated Bundle 7 at pages 3463 to 3476 [84] Exhibit P42A, Consolidated Bundle 7 at pages 3474 [85] Exhibit P41, Business Registration of Decent Internation Trading [86] Exhibits D24(1)-(2), D25(1)-(2) and D26(1)-(2) [87] Exhibit P48 [88] Exhibits D10-D22, Defence Bundle at pages 349 to 397 [89] See MFI-14 at page 2 Table 4 and 5 [90] Consolidated Bundle 16 at pages 7775 to 7834 [91] Exhibit P83“Identification List of Counterparties of ATM Transfer Deposits of BOC Account” [92] Exhibit P21(1)-(4) [93] Exhibit P83 Seq. 8 [94] Exhibit D36(1) to (23) [95] See MFI-14 at page 4 Table 8 [96] See MFI-14 at page 4 Table 9 [97] Exhibits P69 to P71, Consolidated Bundle 14 at pages 6855 to 6861 [98] Exhibit P84, Consolidated Bundle 19 at page 9599 [99] Exhibit P6, Consolidated Bundle 18 at pages 8878–8885 [100] See AC01‑254; Appendix 4 of Exhibit P68, Consolidated Bundle 16 at page 7718 and Exhibit D36(10) [101] Exhibit P6, Consolidated Bundle 19 at pages 9304-9306 and Exhibit P6, Consolidated Bundle 18 at pages 8991-8999 [102] Exhibit P84, Consolidated Bundle 19 at page 9599 [103] Exhibit P6, Consolidated Bundle 19 at pages 9195-9210 [104] Exhibits P83 and P84, Consolidated Bundle 19 at pages 9597-9599 [105] Exhibit D36(6) and D36(5), Defence Bundle at pages 202 and 201 [106] See MFI-14 [107] Exhibit P68, Consolidated Bundle 16, page 7623 [108] Exhibit P10(1)-(55) Consolidated Bundle 7 at pages 3289-3343 [109] Consolidated Bundle 7 at pages 3291-3312 [110] Consolidated Bundle 16 at pages 7621 and 7623, §§56 and 60 [111] Exhibit P86 [112] Exhibit P35, Consolidated Bundle 7 at page 3410 [113] Exhibit P35, Consolidated Bundle 7 at page 3411 [114] Exhibit P64 [115] Exhibit D3(3) [116] Exhibit D3(4) [117] Exhibit D3(6) [118] Exhibit D3(11) [119] Exhibit D3(24) [120] Exhibit D3(3) [121] Exhibit D3(7) [122] Exhibit D3(11) [123] Exhibit P83 [124] Exhibit D36(1)-(5) [125] See MFI-14, Table 8 (Deposits) and Table 9 (Withdrawals) [126] Exhibit D36(6)-(9) [127] Exhibit P58 Business Registration of Kowloon & Attock Trading Co. [128] Exhibit 8, Consolidated Bundle 17 at pages 8379-8405 [129] See MFI-24 [130] See MFI-14 Table 11 [131] Exhibit D3(4) [132] Appendix 4 of Exhibit P68, Consolidated Bundle 16 at page 7712 [133] §27 of CFA judgment in Harjani Haresh Murlidhar [134] §28 of CFA judgment in Harjani Haresh Murlidhar [135] §90 of CFA judgment in Yeung Ka Sing Carson [136] §118 of CFA judgment in Yeung Ka Sing Carson [137] §116 of CFA judgment in Yeung Ka Sing Carson [138] §117 of CFA judgment in Yeung Ka Sing Carson [139] [1986] AC 27, at 39E [140] (1803) 4 East 164, at 171 [141] [1967] 1 All ER 497, at 500B [142] HKSAR v Lai Kam Fat, at §35 [143] Ibid. at [36] [144] Exhibit P49C, counters 831-832 and 1155-1162 [145] Exhibit P49C, counters 871-872 [146] Exhibit P49C. counters 1114 and 1115 [147] Exhibit P49C, counters 1105-1144 [148] Exhibits P20 and P21 [149] Exhibits P44 and P45 and Exhibit P68 at §30 [150] Exhibit D40 at §9(a) [151] Exhibit D33(1)-(21) [152] Exhibit P49C, counters 1739-1837 [153] Exhibits P44 and P45 and Exhibit P68 at §30 [154] Exhibit P42A, Consolidated Bundle 7 at page 3469 [155] Exhibit D33(1) [156] Exhibit P42A, Consolidated Bundle 7 at page 3475 [157] See MFI-11 [158] Exhibit D29; Defence Bundle at pages 407-422 [159] Consolidated Bundle 16 at page 7661 [160] Consolidated Bundle 7 at pages 3381-3382 [161] Consolidated Bundle 7 at pages 3383-3384 [162] Consolidated Bundle 7 at pages 3385-3386 [163] Consolidated Bundle 7 at pages 3387-3388 [164] Exhibit 64 at §27(a) [165] Exhibit P49C, counters 615–633, 640, 657–658 and 878 [166] Exhibit P84, Consolidated Bundle 18 at page 9599 [167] Exhibit P6; Consolidated Bundle 18, at pages 8875–8884 [168] Consolidated Bundle 19 at pages 9304–9306 and Bundle 18 at pages 8991–8999 [169] Consolidated Bundle 19 at pages 9195–9209 [170] Exhibit P83; Consolidated Bundle 19 at pages 9597–9598 and Exhibit P84; Consolidated Bundle 18 at page 9599 [171] Exhibit P49C, counters 769–775 [172] Exhibit D36(5), LFT/63, See Consolidated Bundle 16 at page 7932 [173] See MFI 12; Defence Bundle at pages 296–302 [174] See MFI 13; Defence Bundle at pages 303–323 [175] Exhibit P68 at §67; Consolidated Bundle 16 at page 7626 [176] See Exhibit 68 at §156, Consolidated Bundle 16 at page 7660 [177] Consolidated Bundle 16 at pages 7915 and 7919 [178] Exhibit P68 at §210.3, Consolidated Bundle 16 at page 7683 [179] Exhibit P68 at §42; Consolidated Bundle 16 at page 7617 [180] Exhibit P68 at §42; Consolidated Bundle 16 at page 7617 [181] Exhibit P68 at §§50 and 54; Consolidated Bundle 16 at page 7620 [182] Exhibit P68 at §64; Consolidated Bundle 16 at page 7625 [183] Exhibit P68 at §67; Consolidated Bundle 16 at page 7626 [184] Exhibit P68 at §67; Consolidated Bundle 16 at page 7626 [185] Exhibit P68 at §§76 and 80; Consolidated Bundle 16 at page 7629 [186] Exhibit P68 at §93; Consolidated Bundle 16 at page 7635 [187] Exhibit P68 at §96; Consolidated Bundle 16 at page 7636 [188] Exhibit P68 at §96; Consolidated Bundle 16 at page 7636 [189] Exhibit P68 at §§103 and 105; Consolidated Bundle 16 at page 7639 [190] Exhibit P68, para.115; Consolidated Bundle 16 at page 7643 |
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