HKSAR v. Sailesh Lachu Hiranandani
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CACC 448/2009 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CRIMINAL APPEAL NO. 448 OF 2009 (ON APPEAL FROM DCCC NO. 264 OF 2009) ______________ BETWEEN
______________ Before: Hon Tang VP, Lunn J and Saw J in Court Date of Hearing: 9 June 2010 Date of Judgment: 9 June 2010 Date of Reasons for Judgment: 29 June 2010 ________________________________ REASONS FOR JUDGMENT ________________________________ Hon Tang VP: Introduction 1.The applicant was convicted by Deputy District Judge Woodcock of 5 counts of fraud, contrary to section 16A of the Theft Ordinance, Cap. 210. He was sentenced to imprisonment for 2 years after he has made full restitution. His application for leave to appeal against sentence was dismissed as it was not pursued. 2.The prosecution’s case, which the learned judge had found proved, was that the applicant had promised Ijas Ali (PW1), that a loan of US$6,500,000 would be provided to L’Sure Golf Tourism Pte Ltd (“Leisure Golf”). 3.PW2, Mr Soorali Imthiza, and PW3, Mr Gopalaratham Sundaresan, are Indian nationals and directors of a company, Heritage Golf Private Limited (“Heritage”). They had plans to build a golf club house with facilities and a residential project attached to it in Mysore, India. Heritage was looking for loans to build this resort. PW1 was a friend and a businessman from Singapore who wanted to get involved with and to invest in this project. He stood to gain by helping to procure the loan. In return for doing so, PW1 would receive a service fee, a bungalow on the golf course, and that all future imports would have gone through his import business. The applicant was introduced to PW1 to PW3 by Mr Sharma Ramkhumar as a businessman who could arrange such a loan. 4.In order to obtain a loan, PW1 had paid and procured payments to be made to the applicant or the applicant’s nominee(s). For jurisdictional reasons, not all such payments have resulted in charges. The payments which have resulted in the charges will be detailed below. 5.Eventually, a bank draft purportedly issued by Deutsche Bank (Cayman) Limited, for US$6,500,000 payable to Leisure Golf dated 24 July 2007, was provided on 18 September 2007. The bank draft was presented to a HSBC branch in Mauritius on 26 September 2007 by PW1 for presentation to the Cayman Island Deutsche Bank. There is no dispute that the bank draft was found to be a fake. 6.According to the learned judge:
The facts 7.The facts have been fully set out in the Reasons for Verdict (“Reasons”). I will state them as briefly as possible here. 8.In December 2005, PW1 to PW3 met the applicant in his office. The applicant told them that he could arrange a loan. He had a plush office in an expensive area in Kuala Lumpur. According to PW3, the applicant had explained that he could mortgage properties in UK at a lower rate and lend it to Heritage at a higher rate. On 4 April 2006, an offer letter was signed in the same office at a second meeting. The applicant, PW1, 2 and 3 were present. Exhibit P38 is the offer letter. In the offer letter, Heritage was stated to be the borrower and the lender/arranger was Universal Alliance Limited of London. The offer letter was signed by the applicant as an authorised signatory. 9.According to PW2, the applicant had told them in the December 2005 meeting that he was a director of Universal Alliance. PW1 also recalled that the applicant told him that he owned this company. 10.It transpired that it was difficult for a UK-based company to invest directly in India, so it was agreed that the PW1 should set up a company in Singapore to borrow this money and in turn invest it in India. The company was Leisure Golf which was incorporated on 8 May 2006. As a result, PW1 and PW2 signed an investment agreement (Exhibit P37) to reflect their respective roles and relationships. 11.On 10 May 2006, PW1 and PW3 met the applicant in Kuala Lumpur. The applicant requested a refundable deposit to be paid. That was paid in Singaporean dollars by way of cheque in a sum of SGD68,200. The cheque was made payable to Just Vision Media Pte Limited (“Just Vision”), a company of the applicant. The applicant signed a letter on 10 May, acknowledging receipt of the cheque. That is an admitted fact. 12.On 19 May 2006, an agreement dated 20 May 2006 (“the funding agreement”) was signed in duplicate, according to the prosecution, in the applicant’s office in Kuala Lumpur. According to PW1, he signed on behalf of Leisure Golf and the applicant for the lender Universal Alliance. According to PW1, he and the applicant initialled each page (15 pages) and signed on the last page of the agreement. PW2 and PW3 were present. According to PW1, the originals were kept by the applicant, so that they could be notarised in the UK by lawyers. He was given a copy, which is Exhibit P1. There is a reference in the recital to “notary” although the language is not entirely clear. Although the applicant had said that he would send an original to PW1 after notarization, PW1 had never received one. According to the defence, a funding agreement was signed by a Mr Gandhi and PW1 (what purported to be an original was produced by the defence as Exhibit D1), the applicant was not present when it was signed, Exhibit P1 is a fake document, and the applicant had not signed or initialed Exhibit P1. 13.On 31 May 2006, PW1 paid, at the applicant’s request, the agreed lawyer’s fees of ₤23,000 and he did that by telegraphic transfer to Greenspan & Mechs Limited, London (“Greenspan”). A remittance advice was faxed by PW1 to the applicant. PW1 received Exhibit P47 as an attachment to an email from the applicant. P47 is an invoice from Greenspan for ₤23,000 “towards legal, technical consultancy and financial engineering charges”. End of June 2006 14.The applicant asked PW1 to come to Hong Kong to see the bank draft. PW1 and PW3 came to Hong Kong but they could not find the applicant. After staying a week in Hong Kong, they returned to Singapore, shortly thereafter he received another phone call from the applicant to come back to Hong Kong. 6 July 2006 15.On that day, PW1 and PW3 went to the applicant’s office at Ashley Road, Kowloon. There the applicant requested PW1 to pay a further US$257,600 (approximately 4 per cent of the loan value) in return for the bank draft which would be available within one month. He told PW1 it was the last payment required and he had to pay it. PW1 believed the draft was being processed. He did not have enough cash and could only raised US$157,000. The applicant offered to pay the balance of US$100,000. PW1 left for Singapore immediately to arrange this payment. 16.On this visit, however, Exhibit P22 which was drafted by or on behalf of PW1 was given to the applicant. Exhibit P22 is a memorandum of understanding between Leisure Golf and Universal with a recital that Leisure Golf had been offered a loan of US$6,500,000 by Universal Alliance, which was represented by the applicant, its director. That document was not signed but it was found by the police during a search of the applicant’s office. 11 July 2006 17.PW1 made two telegraphic transfers from Singapore to the applicant’s lawyers Greenspan on the applicant’s instructions in the sum of ₤45,600 and ₤40,000 respectively. These two transfers are the subject of charge 1. 28 September 2006 18.PW1 and PW2 went to Hong Kong at the request of the applicant and according to them met for the first time a person introduced to them as Dinesh Gandhi, who was said to be a solicitor from London. The applicant said Mr Gandhi was arranging the funds. Both the applicant and Mr Gandhi assured PW1 that the loan was nearly all arranged and in place. According to the learned judge,
7 June 2007 19.At the applicant’s request, PW1 went to London to meet him. He met him and a female companion in a hotel in Central London. PW1 pressed the applicant for an explanation for the delay. The applicant suddenly felt giddy and left the hotel, promising to contact PW1 soon. He called PW1 two days later and told him to catch a train to Weybridge to meet him. PW1 sat for two hours waiting for the applicant to pick him up. They went for a meal where the applicant admitted he had problems arranging the funding but that it would be finalized soon. He told him of his personal and business problems. He promised PW1 he was arranging funds. PW1 had no choice but to wait and see. He flew back to Singapore to wait. 31 July 2007 20.The applicant invited PW1 to Hong Kong to discuss the bank draft. PW1 met the applicant at his Ashley Road offices and arranged for PW1 to speak to Mr Gandhi on the telephone. Gandhi said he was in the UK, was very busy and could only bring the bank draft to Hong Kong on 8 August 2007. He had the draft but would not give the bank draft number to PW1 but said it was issued by Deutsche Bank of Cayman Islands. He requested a first class return trip air ticket to Hong Kong from London. The applicant told PW1 if he did not pay for the fares, Mr Gandhi would not fly to Hong Kong with the draft. He calculated the fare to be US$9,548. PW1 went home to Singapore to arrange a transfer of this amount. 21.On 8 August 2007 PW1 remitted the equivalent of US$9,548 from Singapore to Hong Kong to a Mr Lee Sui-chu, an employee of the applicant. The applicant gave PW1 Mr Lee's details and Hong Kong ID Card number. This transfer is the subject of Charge 2. 12 August 2007 22.PW1 and PW2 met the applicant and Gandhi in Hong Kong in the applicant's office. Gandhi showed a bank draft to both of them. There was also a covering letter from Deutsche Bank. PW1 saw the amount was for US$6.5 million. The applicant asked for a further payment of ₤25,000 from PW1 as administration fees. PW1 asked his wife in Singapore to remit this amount to Hong Kong immediately. Exhibit P8 refers to the remittance of this amount to Mr Lee Sui-chu by PW1's wife on 13 August 2007. This transfer is the subject of Charge 3. 23.Next day, PW1 and PW2 met the applicant in his Hong Kong office to collect the draft. Mr Gandhi arrived to demand a further US$80,000 for Cayman Island local administrative charges. PW1 agreed to pay it, instructed his wife in Singapore to remit this amount of money to Hong Kong. Upon the applicant's instructions, it was to be remitted to PW4, Mr Sukhwani Kanayo Jethanand (Kenny) on 15 August 2007. Kenny was a friend of the applicant. This transfer became Charge 4. 24.PW1 was instructed to wait for the applicant and Mr Gandhi at Chek Lap Kok Airport to fly to Singapore together where Gandhi would hand the draft to PW1. Neither men turned up and PW1 travelled alone back to Singapore. Before he left, he called all the telephone numbers he had for the applicant and on one number Gandhi answered. He told PW1 he had lost his passport and would follow him to Singapore that night. He also told him the applicant had flown to Europe the night before. Once again PW1 tried in vain to contact the applicant by various means. 12 September 2007 25.PW1 received a telephone call from the applicant demanding ₤10,000 to travel to Mauritius to hand over the bank draft. PW1 remitted the equivalent in Singapore dollars to Hong Kong and to a Mr Sukhwani Nanik Jethanand, an employee of the applicant. This transfer became Charge 5. 18 September 2007 26.The applicant called and said that the bank draft was in Bangalore and could be delivered to the offices of Heritage Golf immediately upon payment of a final sum of US$80,000 in cash to a Mr Singh in a shop in Singapore. PW1 took a cash equivalent amount in Singapore dollars to this shop and handed it over to a Mr Singh. Mr Singh made a telephone call and spoke in Hindi. Within 10 minutes, PW1 received a call from PW3 in the Heritage Golf project office saying the draft had just been delivered by hand. The next day, 19 September, PW1 flew to India. 26 September 2007 27.PW1 presented the draft to an HSBC branch in Mauritius on 26 September 2007. HSBC informed him the draft had to be presented to the Cayman Island Deutsche Bank and it would require approximately two weeks. He left Mauritius on the 27th. On 12 October the bank called and informed PW1 the bank draft was a fake. Deutsche Bank returned the forged draft to PW1. It was produced as Exhibit P12 and is an admitted fake. 28.After this discovery, PW1 tried to locate the applicant; he did speak to him once. The applicant offered to rearrange new financing. PW1 refused and asked for all his monies already paid to the applicant to be repaid within six months. 29.In April 2008 PW1 travelled to Hong Kong and engaged a solicitor to take legal action against the applicant. There was no response from the applicant except he made two payments. The first payment of SGD17,361 by Asia Exchange Remittance came on 20 May 2008 from Mr Nanik who called and said he was remitting HK$100,000 to PW1 on the applicant's instructions. The second was S$21,000 received by PW1 in Singapore by telegraphic transfer on 5 September 2008 from a Mr Lee Sui-chu (Exhibit P23 and 24 refers to this transfer and was seized from the applicant's office) and it came without a message or prior notice. 30.PW1’s solicitors advised him to report the matter to the Commercial Crime Bureau which he did on 3 September 2008. 31.The applicant was arrested on 14 September 2008 in Hong Kong. The police had recorded two interviews with the applicant on 14 September 2008. They were admittedly made voluntarily. Under caution, the applicant told the police that he was only a middleman and that the funding agreement was made between Mr Gandhi and PW1. He did receive the first payment of SGD68,200 on 22 May 2006 but that was unrelated to the loan. It was an investment by PW1 in the applicant’s company Just Vision that had since closed down. He said that PW1 used the details of two of his employees Mr Lee Sui-chu and Nanik Sukhwani to send money to Gandhi. He knew nothing about the fake bank draft nor did he have it delivered to PW3. PW1 had not come to his Ashley Road office in Hong Kong. When he was shown a copy of Exhibit P1, and asked whether he had seen it before, he said:
32.He said however that he wanted to see the original. When he was asked about the two signatures on Exhibit P1 he said:
33.He also said, presumably referring to what purported to be his signature on Exhibit P1:
34.However, the applicant did not say during either interview that he had Exhibit D1. He did not mention Exhibit D1 at all. 35.Exhibit D1 was delivered to the applicant’s solicitors on 2 October 2008 by Miss Rema Devi Nair, DW1, who was the applicant’s personal assistant. 36.The learned judge convicted applicant, who did not give evidence but called several witnesses. She said:
37.An important issue at trial was the authenticity of Exhibit P1 and Exhibit D1. Exhibit P1 is a copy. Exhibit D1 is an original document, and was examined by handwriting experts. Ms Chan Lai-ping, on behalf of the prosecution, whose report was produced under section 65B of the Criminal Procedure Ordinance, Cap. 221, as Exhibit P50 concluded that the disputed initials and signatures of PW1 on Exhibit D1 were “probably written” by him. Mr Cheng Yau-sang, Patrick on behalf of the defence whose report was also admitted by consent as Exhibit D6. According to Mr Cheng, the disputed initials and signature were written by PW1. 38.However, the authenticity of Exhibit D1 did not depend solely on the opinion of experts. The court had the evidence of the witnesses on the circumstances in which Exhibit P1 and Exhibit D1 came into existence. The evidence for the prosecution came from PW1, PW2 and PW3. 39.The learned judge was aware of the importance the defence placed on Exhibit D1. However, she found:
40.She went on to rightly point out that:
41.The evidence for the defence came principally from DW1 who claimed that Exhibit D1 was signed by Gandhi and PW1 in her presence. This is what the learned judge’s account of DW1’s evidence.
42.After careful analysis of the evidence, the learned judge said of the prosecution witnesses:
43.Another prosecution witness was PW4, Kenny, who was a friend of the applicant. PW4 was involved with Charge 4. That related to US$80,000 which was remitted to PW4 on 15 August 2007. The learned judge accepted the evidence of PW4 and said:
The Appeal 44.The applicant was represented by Mr Graham Harris and Ms Panesar on appeal. 45.Their principal emphasis was on Exhibit D1 and the fact that according to the handwriting experts, PW1 had written or probably written the questioned signature as well as the 15 questioned initials. They submitted that the learned judge:
46.Further,
47.With respect, the analysis by the learned judge of the evidence is compelling. In my opinion it is wholly unarguable that she was mistaken. It is also difficult to understand why if Mr Gandhi was the fraudster, he should have chosen to sign Exhibit D1, which could have been signed by PW1. Even if Mr Gandhi had chosen to sign Exhibit D1, it is difficult to understand why he should have so conveniently left the original with DW1, and never reclaimed it. The learned judge was fully justified when said:
48.Also, after PW1 had instructed solicitors to demand repayment of the monies paid to the applicant, the applicant had on two occasions in 2008 sent him monies without any warning or explanation. The applicant explained to the police that he did it out of sympathy. But as the learned judge rightly said:
49.What is perhaps also telling is that despite such demands for payment, the applicant had not informed the PW1’s solicitors that he was merely a middleman or that Mr Gandhi was the lender. Exhibit D1 was only produced about two weeks after the applicant’s arrest. 50.In the circumstances of this case, the learned judge’s acceptance of the evidence of the prosecution witnesses cannot be faulted. Moreover, as the learned judge has pointed out, it is quite clear that PW1’s payments all went to the applicant or the applicant’s nominees. There is no evidence that any of the money went on to Mr Gandhi which one would have expected if the applicant had been a middleman. 51.Mr Harris submitted that the evidence of PW2 showed that, when he was shown Exhibit D1, he had accepted that Exhibit D1 was the document which was signed. Mr Harris referred to the transcript of PW2’s evidence at 439A to 440L. It is clear from the evidence that he had said no such thing. The transcript of PW2’s cross-examination at 440 between Q and T, show:
52.Mr Harris submitted that PW1, PW2 and PW3 are well educated, qualified experience and mature men, and that the learned Deputy District Judge failed to consider that it would have been inherently improbable for the applicant to dupe them. But it was not disputed they had been duped, and that all they got in return for the many payments was a fake cashier order. 53.The defence case, that PW1, 2 and 3, who had been duped by Gandhi, turned round, and conspired to frame the applicant and produced false evidence and documents in doing so, is inherently improbable. 54.Then it is said that the learned judge was wrong to have accepted the evidence of PW1, and quoting from R v Ng Wing-ming [1995] 1 HKCLR 64, Mr Harris submitted that:
55.But with respect, the learned judge had relied on more than the demeanour of the witnesses. As the Reasons show quite clearly, the learned judge had carefully considered all the evidence as well as the inherent probabilities. 56.For the above reasons, I was satisfied that the evidence against the applicant was truly overwhelming and that he was rightly convicted of the 5 charges. Hon Lunn J: 57.I agree. Hon Saw J: 58.I agree.
Mr. Alex Lee, SADPP of the Department of Justice, for the Respondent. Mr. Graham Harris & Ms Mahinder Panesar, instructed by Messrs Jal. N. Karbhari & Co., for the Applicant (Conviction) The Applicant (Sentence out of time), in person, present. |
Cases cited in this judgment
Further hearings and rulings under CACC 448/2009