HKSAR v. Zhu Nong

DCCC204/2009

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 204 OF 2009

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Reasons for Sentence

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1.The defendant is convicted after trial of four counts of theft (Charges 1 to 4) and one of attempted theft (Charge 5).

2.The victim company FB FEL was a wholly owned subsidiary of FB GMBH, an Austrian based garment label company.

3.FB FEL was incorporated in Hong Kong in September 06 and the defendant was employed to be its managing director. The defendant was previously employed by FB GMBH and was based in Austria. The defendant took up the employment to work as a director of FB FEL and he moved to Hong Kong with his family. As part of the package, the defendant’s wife was also employed to work for FB FEL in Hong Kong.

4.Not long after the defendant had taken up the employment in Hong Kong, the defendant had been asking for 25 per cent shares of FB FEL be given to him. The attitude of FB GMBH had always been that the request for shares of FB FEL was too prematurely made as FB FEL had just been set up and it would not be able to generate any profit. The defendant had renewed his request for shares of FB FEL but to no avail.

5.In May 08, at a meeting held in Vienna between the defendant on one part and PW1 and Mr Valenta of FB GMBH on the other, it was resolved that the defendant would leave FB FEL at the end of December 08. The defendant asked for compensation and he put forward his terms of compensation to PW1. PW1 acknowledged the terms but he was not in a position to accept the terms as he needed the approval of the board of directors.

6.In an email sent by the defendant to PW1 dated 7 July 08, the defendant reduced his terms into writing and amongst other things, the defendant asked for 3 months’ salary for the defendant and his wife be paid before August 08 for what the defendant called non-negative cooperation, i.e. in return for the defendant performing his basic routine duties.

7.FB GMBH had not agreed to those terms and there was no approval from the board of directors. It was the intention of PW1 that he would discuss with the defendant when he came to Hong Kong to discuss the issue of compensation with the defendant. Yet on 28 July 08, through the internet banking services, the defendant transferred 36,000 Euros from the bank account of FB FEL into his personal account (Charge 1).

8.When PW1 met the defendant in early August 08, the defendant refused to discuss the issue of compensation. The relationship between the defendant and FB GMBH deteriorated further. In late August 08, FB GMBH resolved to terminate summarily the employment of the defendant and his wife. A local firm of solicitors was retained to effect the dismissal.

9.PW3, the solicitor retained, attended the office of FB FEL on 2 September 08 with his colleagues. He informed the defendant and the defendant’s wife of their summary dismissals. The defendant and his wife refused to accept their dismissal letters. There were altercations and police officers were summonsed.

10.Charges 2 to 5 took place after the visit by PW3. Charge 2 took place on 2 September 08, it involved HK$200,000. Charges 3 to 5 took place on 3 September 08. Charges 3 to 5 involved 50,000 Euros, HK$96,000 and US$198,000 respectively. As said, Charge 5 was an attempt. The transfer failed as the defendant misstated the debit account number on the transfer application.

11.The defendant has a clear record. He had been in custody for 2 months before he was granted bail.

12.Mr Cheung accepts that the defendant committed the offences in breach of the trust that FB FEL placed on him.

13.In my judgment, the only appropriate form of punishment is one of imprisonment. I am aware that the defendant did not run away with the stolen monies. It was my findings that the defendant intended to force upon FB FEL a fait accompli at a time when an agreement on compensation was not forthcoming (Charge 1) and at a time when FB FEL sought to dismiss the defendant summarily.

14.I have considered whether the aforementioned background amount to special circumstances for the terms of imprisonment be suspended. I come to the view that the circumstances leading to the commission of the offences do militate against the seriousness of the crimes, but they do not amount to special circumstances calling for suspended sentences.

15.If this court follows the tariffs as set down in Cheung Mee Kiu, at the exchange rates of one Euro to HK$10.5 and one US dollar to HK$7.8, the following starting points would appear to be appropriate: Charge 1, for 36,000 Euros, i.e. HK$378,000, a starting point of 26 months; Charge 2, HK$200,000, a starting point of 18 months; Charge 3, 50,000 Euros, i.e. HK$525,000, a starting point of 28 months; Charge 4, HK$96,000, a starting point of 9 months; Charge 5, US$198,000, i.e. HK$1,544,400, a starting point of 3 years and 3 months.

16.But the amount of money stolen is only one of the factors to be taken into account in determining the proper starting point. As said, the defendant did not run away with the stolen proterty. He took the money without the consent of FB FEL at a time when both sides were in a stalemate over the issue of compensation, i.e. Charge 1, and at a time when the defendant learnt that he was dismissed by FB FEL. He forced a fait accompli on FB FEL and thought that he could outplay his employer and give himself an upper hand in his dealings with FB FEL.

17.The special circumstances that existed between the parties at the time of the offences do not call for suspended sentences, but they do merit a substantial reduction from the tariff of Cheung Mee Kiu.

18.For the existence of the special circumstances as I mentioned, I would adjust and reduce the starting points as follows: Charge 1, the starting point of 26 months is reduced to 20 months; Charge 2, the starting point of 18 months is reduced to 14 months; Charge 3, the starting point of 28 months is reduced to 22 months; Charge 4, the starting point of 9 months is reduced to 7 months. For Charge 5, taking into account the special circumstances as discussed and also given that the offence was one of attempted theft and the defendant failed to transfer the money into his own account; instead of a starting point of 3 years and 3 months, I take a starting point of 22 months.

19.Bearing in mind the defendant was a man of clear record, I allow a further reduction of 2 months for each of the offences. It would bring the sentences further down to: Charge 1, 18 months; Charge 2, 12 months; Charge 3, 20 months; Charge 4, 5 months; and Charge 5, 20 months.

20.I am aware that the stolen monies in relation to Charge 2 to 4 are now the subject matter of a Mareva Injunction. I am also aware that the defendant’s family members are all in Austria and they would have difficulties in visiting the defendant in Hong Kong. All these matters, whether taken in isolation or together, do not amount to mitigating factors calling for further reductions. The stolen monies were made the subject matter of a court order only because an application for injunction was made by FB FEL.

21.As for the predicament that the defendant would face while serving his term of imprisonment in Hong Kong, I am sympathetic with the defendant but the defendant should have thought twice before he acted against the laws of Hong Kong.

22.Bearing in mind the totality and as an act of mercy to the defendant and his family, I order that the sentences for Charges 2 to 5 be served concurrently and 4 months of the sentence for Charge 1 be served consecutively to the sentences for Charge 2 to 5. In total, the defendant has to serve a total of 2 years’ imprisonment for all five charges.