HKSAR v. Mazhar Taha Ahmed Elmansouri

DCCC 1309/11

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 1309 OF 2011

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REASONS FOR VERDICT

1.The defendant pleaded not guilty to a charge of  using a false bank draft in the sum of USD 4 million payable to Dolibat Developement Company Limited contrary to s. 73 of the Crimes Ordinance Cap 200.

Background

2.At about 1.40pm on 28 April 2010 the defendant, a 48 year-old Egyptian national, and a female mainlander called Xiao Chufan (“Xiao) attended the Central Branch of the Bank of Communications ( the Bank) on Des Voeux Road Central Hong Kong. They claimed to be husband and wife and asked to open an account in the name of  their company, Dolibat Development Company Limited ( Dolibat). The defendant presented his Egyptian passport and Xiao her Two-Way Permit. They submitted a Business Registation Certificate for Dolibat and a Certificate of Change of Name confirming that the company changed name from DOT.BNS High Tech HK Company Limited with effect from 7 January 2010. The defendant provided the registered address of the company at Chong Ming Building, 72, Cheung Sha Wan Road, with was later found to be false.

3.The defendant handed over the bank draft the subject of the charge which was numbered 358487009 dated 18 April 2010 in the sum of USD 4 million and made payable to Dolibat, P2. P2 purported to be issued by the Dubai Branch of  Samba Financial Group (Samba) and payable by Citibank, N. A. New Castle. The defendant and Xiao asked the bank to encash the draft and deposit the money into their new bank account. They were told to return once the documentation had been checked.

4.According to the prosecution, at about 5.00pm on 28 April, the Bank informed Xiao that the draft could not be accepted because the word “Development” in the Dolibat company name was misspelt with a letter “e” after the letter “p”.

5.At the request of the Bank, the defendant  and Xiao attended the Wong Tai Sin branch of the bank on 11 May 2010 and produced a Companies Registry document showing that the name of the Dolibat company had been changed so as to conform with the spelling in P2. They asked for an account to be opened in the new name and for personal accounts to be opened for each of them. They were to be the authorized signatories of the company account.

6.On 19 May the defendant and Xiao returned to the bank and chopped the company name of  Dolibat Development on the back of the bank draft.

7.The bank were suspicious as to the provenance of the draft. The bank also discovered that  the defendant and Xiao were the only company shareholders and that the name had been changed to Dolibat on 7 January 2010.  The company was renamed Dolibat Developement on 6 May 2010.

8.Samba confirmed that P2 was not genuine and that and that the original draft had been returned to their group for cancellation by the concerned customer, Mr Mohamed Assad Said,  between 13 and  26 May 2010.

9.The defendant was arrested on 26 June 2011 upon arrival in Hong Kong from Macau. The defendant denied knowing that P2 was false. He asserted that he had received P2 in relation to a genuine commercial transaction. He said that as the cheque could not be honoured he had ceased the business relationship with the issuing company.

Prosecution Evidence

PW1 Chan Ching Yee, Cathy, staff of the Bank

10.PW1 told the court that on 28 April 2010 she worked at the Des Voeux Road, Central branch of  the Bank. She said that at lunchtime the defendant and Xiao came to the bank in order to open a bank account for Dolibat. PW1 said that the defendant  produced his passport, P4,  and Xiao produced her Chinese identity card and Two Way Permit, P5 and P6. Photocopies of  the documents were made. PW1 said that they also produced a banker’s draft in the sum of USD4 million, P2.  Bank opening documents were prepared as P7.

11.PW1 said that some time later she was told by her colleagues about the problem with the spelling. PW1 said that she rang Xiao some time after 1700 hours to tell her about this difference.

12.In cross-examination, PW1 confirmed that a Miss Yvonne Chow from the Shenzhen branch of the Bank had introduced the couple to the Bank. PW1 said that a Miss Eva Law who works for the Bank in Hong Kong had referred the couple to her. PW1 said that Miss Law only refers VIP couples.

13.PW1 denied that she went for lunch with the defendant and Xiao on the day they came to the bank and at that lunch discussed how the problem with the draft might be resolved. PW1 said that the discrepancy between the draft and the company name was spotted by other staff to whom she had referred the documents for processing. She said that the documents came back to her to contact the couple about the discrepancy. PW1 denied that she came to know about the problem whilst the couple were still at the bank.

14.PW1 said that she could not recall discussing ways of solving the problem either by changing the company name or getting a new draft.

PW2 Chow Yiu-hang, Branch Manager of BOC

15.PW2 said that in May 2010 he was employed at the Wong Tai Sing branch of  the Bank when he was asked to take over the application by Dolibat to open an account. PW2 said that he noticed the spelling discrepancy. He said he rang Xiao and requested a meeting. PW2 said that Xiao told him she was aware of the discrepancy and would come to the bank to rectify the mistake.

16.PW2 said that together with his colleague, Chin Tsui Wan ( PW3), he met the defendant and Xiao at the Bank  Kowloon Branch on 11 May 2010. PW2 said that they again produced their identity documents and filled in application forms to open four accounts for Dolibat with the amended spelling of  “Developement”, four accounts for the defendant and four accounts for Xiao.

17.PW2 said that he spoke mainly with Xiao and because of the defendant, 80% of the conversation was conducted in English. PW2 said that he asked Xiao why she came to Hong Kong to open a bank account and she said that as the company had business dealings with countries all over the world it was convenient for them to have a Hong Kong bank account. PW2 said that he asked her about P2 and she said that the amount was a downpayment for goods received from the Imperial Arabic people. PW2 said that Xiao said that she would like to receive the money as soon as possible so that production could be proceeded with on the mainland.

18.PW2 said that the only deposit in respect of the 12 accounts which they sought to open was one of HKD 500 into the Dolibat account. PW2 said that the account was formally opened on 19 May 2010.

19.PW2 agreed that they bank will check bank drafts submitted to them.

20.PW2 said that he later examined the draft and discovered that the metallic strip at the top was falling off ,and when he checked for watermark using a UV light he found that there was none. PW2 said he contacted Samba  via the Texas System and it was confirmed the draft was a forgery.

21.PW2 said that he had been a banker since he graduated in 2004. He said that he had not previously come across a situation where a customer had changed the name of a company to coincide with the name of the payee on a financial instrument.

PW12 Elanjikal Bhaskaran Ramadchandran, Manager of Samba Fininancial Group Dubai

22.PW12 said he is head of internal financial control of the Samba Financial Group in Dubai. He is a post graduate of Mumbai and has a Masters Degree in Financial Management.

23.PW12 said that Samba is a banking entity incorporated and licenced in Saudi with branches in Dubai, Qatar and London. He said that it is a very old established bank.

24.PW12 said that  he had dealings with the bankers’ draft P2.  PW12 was referred to Ex P11 a money transfer application dated 15 April 2010 for USD4 million. He confirmed that the beneficiary is Dolibat. PW12 said that there is a debit account number on the right hand side 9185000/0 in the name of Dolibat.

25.PW12 said that the remitter referred to in P11 is Mohamed Assad Said, a customer of the bank since February 2008. The application was approved which meant there were funds in the account. PW12 said a draft would be issued and Exhibit 12 is the draft, a bankers’ draft for USD4 million. PW12 said that Exhibit 23 is a photocopy of the document. PW12 said that Ex 12 was issued following the acceptance of the application.

26.PW12 said that the middle of P23 is the draft. The bottom is a conversion to AED currency.

27.PW12 said that  Citibank  is the bank through whom it is routed for clearance by New Castle DE is in the United States of America.

28.PW12 said that the draft was prepared in the main branch in Samba in Dubai and is signed by an authorized member of the bank. PW12 said that when the draft is prepared all three parts are handed to the customer personally or his authorized representative.

29.PW12 said that P23(1) is a copy of the  carbon copy of the draft and shows the signature of the person who collected it. He said that the person collecting it would have to show some form of identification and authorization. PW12 said that on the reverse of Ex 23 is some writing including a box for “Payee’s endorsement” which will enable the beneficiary to endorse it further. PW12 said that this box is blank in the original.

30.PW12 said that Ex 23(1), the  carbon copy of the draft, is retained by the bank, the copy is printed not-negotiable which is not printed on the Ex 23.

31.PW12 said that Ex 13 is a letter dated 17 April 2010 and stamped by the bank the day it was received by Samba from the customer authorizing the cheque to be given to Mr Ahmed Mahmoud Elehemily ( Ahmed), passport number 4127897. PW12 said that the customer  asked to be informed before payment was made.

32.PW12 said that the draft would be given to Dolibat and they would deposit it in its bank. PW12 said that that bank would send the draft to Citibank New York, once they receive it they will debit the account held by Samba with Citibank New Castle New York. PW12 said that  Citibank would contact Samba to inform them they will be debiting the Samba account and crediting the Dolibat bank. PW12 said that the draft never came for clearing. PW12 said that had the draft reached Citibank, Citibank wold have contacted Samba who in turn would have contacted the customer to authorize payment.

33.PW12 said if they had failed to telephone the customer the bank would bear the liability.

34.PW12 said that Ex 14 is a letter from Said to Samba dated 17 April 2010 received on 18 April to activate his account. The account had been inactive and this letter was to reactivate the account. PW12 said that the draft was given to Ahmed  who produced his passport, Ex 15, and residence permit of the Kingdom of Saudi Arabia, Ex 17.  PW12 said that Ahmed  would have to go to Samba’s premises and his identity would be verified. PW12 said that the identity documents would be photocopied.

35.PW12 said the signature on the draft produced, Ex P12, is cut out as it was cancelled. PW12 said that the draft is marked “liquidated 26 May 2010” which means that the money is given back to the customer’s account which renders it null and void. He said that the customers account was debited when the draft was issued.

36.PW12 said they came to know about a forgery attempt in relation to this draft in Lebanon and informed the customer of this matter. PW12 said that the customer confirmed that the draft was still with the customer and the customer returned it to the bank.

37.PW12 said that Ex 20 is a letter from Said dated 8 May 2010 and asking for the draft to be cancelled and the amount returned to the account.

38.PW12 was referred to Exhibit 21, a Texas System banking communication, from the Bank,  dated 20 May asking for confirmation that the demand draft, P2, which purported to be issued by Samba. PW12 said that the Bank  sent Samba a copy of the draft they received from Dolibat.

39.PW12 was shown Exhibit P2. PW12 said that this document is a forgery. He said that it is smaller in size than the original draft. He said that the word Citi is written continually on the original  and that his does not appear on P2.

40.PW12 said that on the reverse side of the original there is the contact information of Citi bank which is missing from P2. PW12 said that there is a place for Payee’s endorsement on the reverse of the original which is missing from P2. PW12 said that at the top of Ex 23 there is a chained watermark visible when the a genuine draft is held up to the light. PW12 said that his is missing from P2. PW12 said there is a metallic line at the top of P2 which does not appear in the original.

41.PW12 said that exhibit 24 is a sample of the bank draft documents. PW12 said that the second page shows the carbon insert and the third page is the page for the carbon copy which is the same as the original draft.

42.PW12 agreed when cross-examined that the spelling mistake relating to the word “Developement”  on the original draft, P12, originated at the bank.

43.PW12 agreed that there was a genuine request from Said for USD4 million with funds to support it and the payee was Dolibat Development Limited.

44.PW12 said that the original draft, P12,  was properly collected by a representative who had used valid identification and the cheque found its way to Said. PW12 said he has not spoken to Said.

45.PW12 agreed that a  problem arose in relation to a related matter in Lebanon. He agreed that as a result of the problem in Lebanon, Samba stopped the whole process in relation to the draft. PW12 said that when the draft, P12, was issued,  Said’s account was debited. He agreed that this would show USD4 million had come from the account. PW12 agreed that the payment could not go through without a call to Said.

46.PW12 said the only communication for stopping the draft  from Said was the letter from Said dated 8 May 2010, P20. PW12 agreed that this was not date stamped by the bank to indicate when the bank received it. PW12 said the letter was received but not chopped with a date of receipt stamp, it was endorsed by the manager of the team “OK to liquidate the check”.

47.PW12 said that they received notice of the forgery attempt in Lebanon on 13 May 2010. He said that they informed Said that day and he said he would forward the cheque to them for cancellation which he did. PW12 said he was contacted by a colleague at the bank by telephone who told PW12 what he had done in relation to this matter.

48.PW12 said that at the Samba Bank no one noticed the spelling error until much later in mid to late May.

49.PW12 said that Ex 25 is an e-mail from Mr Alaa Ataya at Samba in the cash management department of the bank. PW12 said he knows him and he is still with the bank. PW12 said he was not aware Ataya was contacted by the defendant at the end of April.

50.PW12 said that Mohammed Saleem referred to in the e-mail is employed in the Head Office in Riyadh. PW12 said that the other persons referred to are Mosleh, the signatory of the draft, and Asadi , the manager of Alaa Ataya. PW12 said that it is an internal bank e-mail.

51.PW12 said that he did not know when  the original draft was received back but it was between 13 and 26 May 2010.

52.PW12 said that in relation to P2, there is some sort of vertical watermark but it is not the same as the one used by Samba. PW12 said it was not of the chained variety as with the Samba draft. PW12 said agreed that as P2 has been subjected to chemical analysis the colouring may be slightly different. PW12 said that the silver metallic strip at the top of P2 is not on P23 which has a green border.  PW12 said that he did not know if there is on metal strip at the top on an original draft. PW12 said that he has never spoken to Said.

53.PW12 said that in relation to P2 the quality of the paper would raise doubts as to its authenticity. PW12 said it does not look genuine. PW12 confirmed that P2 did not come from Samba and was not a genuine Samba document.  PW12 said he did not know how P2 was created.

54.It was pointed out to PW12 by the court that the some of the letters on P2 and the signature appeared to be in green ink. He said that the bank does not use green ink.

PW8 Chiu Pak Keung, occupant of registered address of Dolibat

55.PW8 said he works in transportation. He is married with educated to Junior second school. He has five children.

56.PW8 said that he had lived at Room B, 8/F, Chong Ming Building, 72, Cheung Sha Wan Road for about 5 years since 21 March 2007. PW8 said he rents the flat and has lived there continuously with his wife and five children and pays a rent of HK4500 plus HKD430 management fee.

57.PW8 said he used the same address for correspondence. PW8 said since he moved in people came trying to get in touch with a company and he told them it is not a company address. PW8 said he had no company address. PW8 said he had not consented to his address being used. PW8 said the last time someone came was last year. PW8 said that he could not recall if the name of the company was mentioned.

58.PW8 said that he received letters which were not addressed to them. This happened frequently. He said that he passed them to the management office.

59.PW8 said he had never heard of Dolibat. PW8 said he had never heard of the defendant. PW8 said he had never seen the defendant before. PW8 said he had never heard of Xiao. He said that there has never been any business in his flat.

60.In cross-examination, PW8 told the police that several months after moving in different persons came to the flat looking for payment and looking for companies. PW8 said Mme Kam Yung is the landlady and she told him to take letters to the management company which he did.

Admitted Facts – Exhibit P27

61.Certain facts were admitted into evidence pursuant to the provisions of s. 65 C of the Criminal Procedure Ordinance Cap 221.

Video Record of Interview – P1

62.It was an admitted fact that P1 was voluntary and I was not invited to exercise my residuary discretion to exclude it on grounds of unfairness.

63.During the course of the interview the defendant was asked about the bankers’ draft, P2. At counter 1540, the defendant said that the cheque came from Assad Said. At 1554 he said that the financial manager of Said’s  company, Ahmed, came to Hong Kong and handed the cheque to him in person.

64.At counter 1674 the defendant said that he had entered into a contract with the other party in relation to the deal for which P2 was issued. When asked if he had taken legal proceedings in relation to this matter he said  at 1704 “ Sure, I thinking, but this time, my wife start to be pregnant, so I take care about my wife; I do not take care about the business.”

Defence Evidence

65.The defendant elected to give evidence. He told the court that he was born in Egypt in 1961. He attended Commercial College in Cairo. He said that he also attended a commercial course in England which lasted for two months.

66.The defendant said that he first worked for a German owned petroleum company based in Egypt. He said he worked for this company for 10 years and was an administration manager when he left dealing with human resources matters. The defendant said in his examination in chief that he worked as a commercial adviser to the Royal Family of Saudi Arabia from 1999 to 2008. The defendant said in cross-examination that from 1990 for a period of 4-5 years he and some business partners set up a factory for slaughtering chickens. He said that business concluded when there was an outbreak of some kind of  bird flu. The defendant said that he and his partners then ran a property business, buying , selling and leasing property in Egypt. The defendant said that it was whilst he was engaged in that business that he met a Saudi prince and a business relationship started between them and other members of the Saudi Royal Family which required frequent flights to the Far East seeking business opportunities.

67.The defendant said that in 2008 he met his current wife at the Hong Kong Sheraton Hotel and thereafter he started to invest in a number of businesses in Shenzhen. He said that in particular he invested in a large factory in Songgang in Shenzhen which was owned by the Lufan Investment Group. He produced a brochure, D1. The group have a number of subsidiaries including Shezhen DOT Techonology Limited ( Shenzhen Dot) and IBAT Technology (Shenzhen) Co Limited ( Ibat Shenzhen).

68.The defendant said that he was also involved in another business, a software company called Eye Software (Shenzhen) Company Limited ( Eye Software Shenzhen). He produced a brochure about the company as D3. The company Hong Kong Eye Software Company Limited ( Hong Kong Eye) was incorporated on 24 September 2008

69.The defendant said that he had also set up another company called Ibat International Business and Trading (HK) Limited ( Ibat Hong Kong) which deals in general trading. Ibat Shenzhen was referred to in D1 as being part of the Lufan Group. According to the admitted facts Ibat Hong Kong was set up on 4 July 2008.

70.The defendant said that he set up a company called Dot Screen Limited to deal in LED products. It was an admitted fact that Dot Screen was incorporated on 1 December 2008.

71.The defendant said he also set up DOT.BNS High Tech HK Co Limited to deal in software. It was an admitted fact that this company was incorporated on 19 November 2008. It later changed its name to Dolibat in January 2010 and to Dolibat Developement on 6 May 2010. The defendant produced a brochure for Dot BNS High Tech HK Co Limited as D2. The pages inside the brochure all refer to Shenzhen Dot Technology Company Limited.

72.I noted that the defendant and Xiao were the directors and 50 % shareholders of each or the companies and  the registered address of each company was the same  false address.

73.The defendant said that his company in Shenzhen had a large number of employees and administrators and that it was necessary to go through an agent in Shenzhen to arrange for the Hong Kong company registrations. He said that he also had another agent in Hong Kong who handles all correspondence in Hong Kong and forwards it to his Shenzhen agent. The defendant said that the name of the Hong Kong agent is HK Xing Hong Registration Limited. I noted that it was an admitted fact the the registered address for this company was also the same false address as for the defendant’s four Hong Kong registered companies.

74.The defendant said that in January 2010 he decided to specialize in one new device which his engineers had designed and he would use the Dolibat company in respect of this product. He said that he decided to trade worldwide and he decided that Eye Hong Kong would specialize in programming and Dolibat would specialize in marketing. The defendant said that he invested over USD200 million in the China enterprises.

75.The defendant said that in September 2010 his wife became pregnant and because of asthma had to spend much of her time in hospital and so he decided to change his lifestyle so as to take care of her in Zhuhai. He said that his daughter was born on 11 June 2011.

76.The defendant said that he first became involved in BOC Shenzhen in 2008 where he had both private and corporate accounts. The defendant produced a schedule of the various accounts he held as D4.

77.The defendant said that he first came to know Assad Said ( Said) at the beginning of 2010. The defendant said that he had an agent in Saudi Arabia called Emad. Emad had a relationship with the managing director of the SABB bank in Saudi Arabia called Yousseif and Yousseif knew Said.

78.The defendant said that he came to know that Said was a businessman on a large scale. The defendant provided copies of downloaded internet information about the company as part of Exhibit D5 ( Page 3). I noted that his referred to Mr Ahmed Al Hemily as a Board Member of Assad Said. PW16 had said that the original banker’s draft,  P12, was handed to Ahmed on the instructions of Said. The defendant produced a contract dated 14 April 2010,D6, which he said was the export contract between Dolibat and Assad and was related to P2. He said that the draft, P2, was for payment under the contract for the supply to Assad of the electronic gates and other items the subject of that contract. Clause 1 of the contract refers to an invoice attached to the contract. The defendant said that the original contract was sent to his agent, Emad, by e-mail and post. The defendant said that he did not have a copyof the invoice. He then said that the invoice is with his wife in China.

79.The defendant said that the contract was drawn up by an Arab lawyer. In relation to clause 2, which purports to deal with maintenance costs, the defendant said that it meant that after the goods were exported a sales local technical maintenance company would be chosen. The defendant said that this was the fastest way as they needed he goods as soon as possible.

80.The defendant said that he met Ahmed in Hong Kong on the 29 April 2010, which was the  day after the defendant presented the cheque to the Bank. He said that Ahmed stayed for one week. The defendant said that Ahmed wanted to know when the goods would be delivered. The defendant said that he received the draft from Youssief by the courier company DHL 2-3 days earlier. The defendant produced a DHL Air Waybill document dated 21 April 2010 as D7. The description of the documents in the Waybill is “urgent documents”. The Waybill was sent to the address of the defendant’s wife in Zhuhai.

81.The defendant said that he went with his wife to the Bank on 28 April and presented P2 to the bank for encashment. The defendant said he did not notice the misspelling of his company. The defendant claimed that they went for lunch with PW1 and at that lunch there was no further discussion of P2. The defendant said that later that day, PW1 called his wife and informed her about the mistake in the spelling of his company name on P2. The defendant said that PW1 told his wife that they should return to the bank the next day with the company cheque. The defendant said that he and his wife returned to the bank the next day and  claimed that PW1 informed him that there were two options. They could either change the name of the company or get a new draft with the correct spelling. The defendant said that this conversation took place at the bank on the morning of  29 April but he could not recall what time. The defendant said that he told PW1 that he would return to the bank when he had changed the company name. The defendant said that his wife had a conversation with their agent in Shenzhen who told them how long it would take to change the company name and they decided that that was quicker than getting a new draft. The defendant said that this job was very important as there was very good profit.

82.I noted that it was never put to PW1 that she had any dealings with the defendant on 29 April.

83.The defendant said that he discussed the situation with Ahmed  who told him that the contract was very urgent and that it would take a long time to get a new draft. The defendant said that Ahmed told him that if the goods could not be delivered very quickly the deal would be cancelled. The defendant said that he left the draft with PW1 as she explained that changing the company name would be the short way to resolve the situation, otherwise he would have taken the draft with him.

84.The defendant said that he returned to Wong Tai Sin branch of BOC on 11 May, after the company name had been changed. The defendant said that he gave the company documents to PW2 and completed the account opening forms. The defendant claimed that after he left the bank, PW2 ran after him to request he sign some further forms. I noted that this was never put to PW2.

85.The defendant said that there was later a telephone conversation between PW2 and his wife and that PW2 said that the matter would take 40-45 days. He said that PW2 advised him not to send the goods until the cash was in his account. The defendant said that 3-4 weeks later his wife spoke with PW2 who told her that the the bank could not collect on the cheque but gave no reason.

86.The defendant later claimed that he received correspondence dated 7 June 2010, D9, from Said cancelling the contract due to “change in design”. The defendant said that the other party claimed that it was the fault of his bank as the defendant  could not even get a document from the bank to explain why they were unable to collect on the draft. The defendant claimed that he spoke with PW2 several times but PW2 was unable to inform him as to the reason they were unable to collect on P2 and were not prepared to provide an explanatory letter.

87.The defendant said that following the failure of this deal he entered into another contract with Said for the sale to Said of  LED screens valued at USD5 million. The defendant said that in September 2010 he travelled to Saudi Arabia and at the office of Said he met up with Ahmed and Youssuf and they entered into a contract which he produced as D10. He said that the invoice dated 14 September related to this contract. The defendant said that the handwritten documents attached were written by  Ahmed and Youssuf. The defendant said that the deal did not got through.

88.In cross-examination it was suggested to the defendant that all the documentation he produced was false and the he was not involved in major commercial international trading as he alleged.

89.He alleged that he was sent by some  Saudi Arabia princes to  Korea to negotiate an agreement with Samsung for electronic spare parts for airplanes. He said his negotiations were successful and this pleased the prince and the Saudi Government. The defendant said he knew nothing about airplane parts and notwithstanding his assertion that the deliberations were very sensitive he used an interpreter he had arranged himself from the Korean Islamic Centre. The defendant denied he was making all this up to create an impression that he dealt in sensitive  and substantial international trade deals.

90.The defendant claimed to have had an association with various members of the Saudi Royal family over a period of 9 years. He claimed that his role was to assist them in finding and developing business opportunites. He claimed to have travelled with the first class to Hong Kong, China and Korea. The defendant claimed that when he came to Hong Kong  he was offered business opportunities here but could not recall the name of the company.

91.He claimed that the first deal concerned a fingerprint machine devised for airport immigration control points worth USD3 million. The  defendant said that the prince concerned later became an agent for the Korean companies.

Exhibit D6 – Purported Dolibat/ Assad Said Contract dated 14 April 2010

92.The defendant claimed that the documents attached to Exhibit D6 related to a contract between his company, Dolibat and Assad Said Company for the sale of electronic gates and components in the sum of USD 4 million. The defendant claimed that it was in relation to this contract that exhibit P2, the purported bankers draft the subject of the charge was received by him. The defendant claimed that there were many negotiations between his agent Emad, Youssuf and Said in Saudi Arabia and that the negotiations started about one month before the contract. The defendant claimed that there were many e-mails exchange between him and Emad and that he had given such correspondence to the lawyers representing him. No such correspondence was produced in court.

93.The defendant claimed that the document was prepared by a Saudi Lawyer in Arabic. The defendant said that “the scope of works and prices list shown below” referred to in Clause 1 were with the contract. When asked about the specifications referred to in clause 1 (1) (2) of the contract he said he was able to get hold of such documents.  Two days later, in relation to this matter he produced the “ Proforma Invoice” dated 12 April 2010. This was attached to Exhibit D6 for reference purposes. The defendant said that he was able to obtain this proforma from his wife in China at short notice as it was on her computer. He said that the original documents were on his computer but he later purchased a new computer and did not save many of the documents from his original computer. He was again asked about the technical specification documents  and he said that he  no longer had these documents. I noted that the delivery date on the contract is 15 days whereas the pro forma relates to 45 days. The contract was silent as to place of delivery, the invoice referred to Hong Kong  or China ports and the defendant said the goods were to be delivered in Saudi Arabia. I also noted that as regards maintenance the contract stated at clause 2 that the maintenance prices shall be as what is agreed within contract but there were no details as to what that agreement should be.

94.The defendant claimed that he had a file in relation to this deal but did not keep the file.

95.The defendant alleged that the letter cancelling this contract was D9. I noted that his came from Assad Said, the company, and not a lawyer, and is in English. It refers to a change in design without specifying what the  change was or making reference to any part of the contract or specifications.

96.The defendant claimed that he was intending to obtain the goods referred to in the proforma from 10 different mainland suppliers but he had no evidence of dealings with any of  them.

D10 Proforma Invoice dated 14 September 2011 between Assad Said and Ibat Hong Kong

97.The defendant maintained that following the collapse of the deal the subject matter of D6, he continued to have business dealings with the Assad Said Company. He said that there was a contract for the sale of a “hi-tech production line for screen  with tools of LED Manufactory” in the sum of USD5 million as evidenced by the documents attached to D10. I noted that there was no contract with the documents produced and many of the documents were handwritten. Again I noted that although the defendant claimed in cross-examination that there were e-mail exchanges in relation to this alleged contract none were produced.

98.The defendant said that the deal did not proceed.

D11 – Various Contracts

99.The defendant was cross-examined about the various documents submitted as part of D11.

Air Waybill

100.The first document was headed  Airway Bill and purported to relate a consignment of  69 various home appliances worth HKD16,153.28 by Dolibat to “Prince Faisal Bin Fahed Bin Saud  Bin Hasloall Al Saud ATT: Legal Counsel and the Legal Representative”.

101.The only date which appeared on this document was  28 June 2011, 2 days after the defendant was arrested. There is  a reference to an attached invoice but none was produced.

102.The defendant denied this was a sham document.

Letter dated 18 April 2011in relation to “PASS”

103.The defendant had claimed that this related to a “Nano Pass” that he was producing which he claimed was a unique device that he was developing.  The defendant claimed in cross-examination  that this device was the “dream of his life” and would make him the “richest person in the world”.

104.The defendant said that it took one year to develop by his highly specialized staff  at a cost of RMB 1 million. He said that they had sent  device to HRH Prince Al Soud and they had replied with the letter dated 18 April and he said that with this letter there was an e-mail asking for modifications which he could easily make. The defendant claimed that the device was made and tested in Shenzhen one week before he was arrested ( date of arrest 26 June 2011). The defendant said that he could not trust anybody else with this project and because of his arrest it did not proceed. The defendant said that all his business ground to a half after his arrest.

Purported Agreement between defendant’s companies and Shenzhen Wuzhou International Freight Company Ltd( Shenzhen Wuzhou)

105.This document was also part of  D11 and  purported to be an agreement dated April 2011 between Dolibat,IBAT, Dot Screen, Hong Kong Eye and Shezhen Wuzhou. The defendant denied this was a sham. I noted that the chop for Dolibat was in the  name of the company as before it was amended on 6 May 2010 whereby and extra “e” was put in development. I also noted that it included very vague phrases such as “ building safe, believing and win-win cooperation relationship”.

Memorandum of Cooperation Railways Scrap Sale contract dated 5 July 2011

106.This purported memorandum of cooperation was between ST. Engineering SRL, Baosteel Recources Company Limited and Ibat Hong Kong. It purported to relate to over 1 million tons of railway scrap at USD410 per ton.  It therefore involved over USD400 million.  

107.In cross-examination the defendant said he used to know a representative of of St Engineering and he was to meet him in Hong Kong on 26 June 2011, the day the defendant was arrested. The defendant said he was to receive 3% of the profit as intermediary. The defendant claimed that he would receive the shipment and act as the intermediary.

108.The defendant denied this was a sham. The defendant agreed that the terms of the agreement were set out in great detail but that there was no reference to his role. The defendant claimed that there was an attachment to the memorandum.

109.He said he had e-mail correspondence in relation to the agreement which he could produce the following day. None was produced.

VRI Exhibit P1

110.The defendant was asked why in his record of interview he said that he was given P2 by Ahmed when Ahmed came to Hong Kong whereas in his evidence he claimed that he received the cheque by DHL delivery a few days before Ahmed arrived. The defendant said it was a mistake in translation.

Directions

111.I reminded myself that the prosecution are required to prove each and every ingredient of the offence beyond reasonable doubt, the defendant has nothing to prove.

112.The defendant had a clear record which is relevant to the issues of credibility and propensity.

113.I reminded myself that in relation to the VRI produced,  Exhibit P1, exculpatory statements are admissible as evidence of their truth and I bore in mind his clear record when considering the credibility of such statements.

114.I reminded myself that if I were to reject the exculpatory statements made by the defendant and or what he told the court, that does not mean he is guilty of the offence. I have to consider the evidence I do accept and decide if that satisfies me of his guilt to the required standard.

115.I reminded myself that where the prosecution rely on circumstantial evidence, the court is only entitled to draw an inference from facts proved beyond reasonable doubt. Any inference drawn from such facts must be the only inference that can reasonably be drawn, it must be an irresistible inference.

Evaluation of the evidence

116.Much of the prosecution case was not in dispute. It was accepted that at about 1.40pm on 28 April 2010, the defendant and his wife, Xiao, went to the Bank and completed a bank opening account form, P7, to open an account for Dolibat. The defendant and Xiao were the directors and joint shareholders of Dolibat.

117.The defendant handed P2 to PW1. P2 purports to be a draft drawn on the Samba bank in Dubai,  dated 18 April 2010 in the sum of USD 4 million. I accepted the evidence of PW12, a Samba manager, that P2 was a false document. PW12 said that the original draft, P12, was issued on the instructions of  a customer of his bank, Mohamed Assad Said ( Said) , in the name of Dolibat and that the bank staff had wrongly spelt the word development in the draft. The draft was collected by Ahmed, a person in the employment of Said.

118.I was sure that later on 28 April 2010, Xiao was contacted by PW1  and told that the incorrect spelling of  “Development” in P2.

119.On 6 May the name of  Dolibat was changed so as to coincide with the name on P2.

120.PW12 produced Exhibit 20, a letter from Said dated 8 May 2010, instructing the bank to cancel the original draft, P12. PW12 said that P12 was returned to the bank some time between 13 and 26 May 2010.

121.On 11 May 2010, the defendant and Xiao returned to the bank with the Companies Registry Change of  Name certificate obtained on 6 May and complete bank opening application forms to open 12 bank accounts, four in the name of Dolibat with the amended spelling, four for the defendant and four for Xiao.

122.On 20 May 2010 the Bank sent a “Texas System” telecommunication to Samba asking Samba to confirm that P2 had been issued by them (Ex21). Samba responded and stated that the draft was forged and should not be honoured ( Ex 22).

123.On 26 May the Bank were informed that the original draft issued by Samba had been cancelled.

124.The defendant was arrested on 26June 2011 when he returned to Hong Kong via Macau.

125.The registered address of Dolibat was false. It was the residential address of PW8 who had no connection with the company. He had lived at the address with his wife and 5 children for 5 years. The same false address was registered for all four Hong Kong companies owned by the defendant and Xiao.

126.Under caution, the defendant admitted presenting P2 at the Bank but denied knowing it was forged. He told the police that he had received P2 personally in Hong Kong from Ahmed in respect of a genuine commercial contract. The defendant told the court that he received P2 by DHL delivery on 26 April 2010 in respect of a contract, D6, for the sale  of electronic gates by Dolibat to Assad Said.

Evidence of the defendant

127.I have set out in some detail the evidence of the defendant and what he said when interviewed.

128.The defendant asserted  in evidence that he was involved in substantial international trade and enjoyed a personal and commercial relationship with various Saudi Arabian princes. He produced documentation and various brochures to support such claims.

D6 Dolibat/ Assad Said Co Contract dated 14 April 2010

129.The contract produced by the defendant as D6 purported to show that Dolibat had contracted to sell electronic gates for parking and compounds to Assad Said Company for USD4 million. It was the evidence of the defendant that P2 was received by him pursuant to that contract.

130.The defendant said that the contract was prepared in Arabic by a lawyer acting for Said following negotiations with the defendant’s agent, Emad,  Emad’s banking acquaintance, Youssuf and Said in Saudi Arabia. The defendant claimed he also had a lawyer in Saudi Arabit acting on his behalf.  The defendant said that there was e-mail correspondence in relation to this contract which he had given to his lawyers. None was produced. The defendant said that he kept a file in relation to this matter but it could no longer be located.

131.The defendant said that he did not have a contract with the 10 manufacturers who were to supply the goods referred to in D6 nor did he have a quote from them. The defendant said he had photographs of the goods.

132.According to clause (1) 1-3. of the contract the products were to be supplied within 15 days “from receiving cheque issuance confirmation from [Assad Said Co’s] bank  ( who issued the cheque).”  P2 is dated the 18 April. The defendant said he received the draft on 26 April 2010 by DHL delivery. This conflicts with what he told the police in P1, his video recorded interview, that he had been handed P2 personally by Ahmed in Hong Kong.

133.According to the Proforma Invoice later produced by the defendant which he claimed to be part of D6, the delivery time is “during 45 dayes (sic) from confirem (sic) bank draft”.

134.The contract states that the products supplied shall be

“based upon specifications as well as conditions listed within scope of works and prices list shown below.Herein below a description of approved scope of work:

1-     Work Execution

1.     [Dolibat shall execute agreed upon works under this contract with its terms and conditions.

2.     [Dolibat]shall insure that the supplied products are compliant with technical specifications.”

No specifications were produced.

135.Clause (1) 2, which purports to deal with prices states that  ( Clause 1) “ Maintenance prices shall be as what is agreed upon within contract”. There was no evidence as to what this refers.

136.The defendant was asked about the “invoice no. 2130410” referred to in the contract. The defendant said that he could produce it. He later produced the proforma invoice attached to D6. He said that his wife found it on the computer in his office. He then said that she found it in her personal e-mail in her office.  The defendant said that he would sometimes send  things to her computer.  The defendant said that this was all that could be retrieved from her computer in relation to D6. The defendant said that his computer was destroyed a long time ago and he bought a new computer. The defendant said that the pro forma was in English unlike the body of the contract.

137.The defendant produced a letter dated 07 June 2010, D9, which purports to  come from Assad Said Company and to be signed by Said. I noted that the letter is in English and  is extremely vague. It purports to come from the company direct and not from the lawyers whom the defendant said drafted the contract. The letter states that the contract dated 14 April 2010 is to be cancelled due to “change of design”. According to the defendant, there were 10 types of product to be supplied and as the draft was not honoured he never obtained the goods from the manufacturers. D9 does not refer to any specific item or the design change to which they took exception.

P2 The draft

138.I accepted the evidence of PW12 that P2 was a false document for the reasons he gave in his evidence. The original draft had been returned to the bank. PW12 said inter alia that the vertical watermark was not the same as the one used on Samba drafts. He said that the quality of the paper was different and that alone would have raised doubts as to the authenticity of  P2.

139.When considering all the evidence in relation to P2, I had no doubt that it was a sham.

Exhibits D10 and D11

140.These documents were produced by the defendant with a view to showing that he was involved in further substantial business dealings with Said, shipping companies and Baosteel. I have set out the evidence in relation to these matters in some detail above.

Exhibit D10 Ibat Proforma Invoice dated 14 September 2011

141.The defendant said that following the collapse of the deal in relation to the electronic gates for which P2 was issued, he continued to have business dealings with the Assad Said Company. He maintained that there was a contract from the sale of “hi-tech production line for screen with tools of  LED Munufactory” in the sum of USD5 million as evidenced by the IBAT proforma document and the attached notes. Despite the size of the deal, the defendant was unable to produce a conctract or any e-mail communications.  I noted that with the proforma there were some handwritten notes and jottings which he claimed had been written by Ahmed and Youssuf.

142.I noted that he claimed that D6 had been drawn up in Arabic  by lawyers acting for both him and Said. According to the defendant Said had resigned from that contract because the reason given in D9, namely, change of design. Had these been genuine transactions, given the very vague reason given by Said from withdrawing from the D6 contract, and the assertion by the defendant that he was the one  to lose out as a result of the cancellation of  D6, one would have expected the defendant to have been very cautious in any further dealings with Said and ensured that everything was very clearly set out.

D11 – Various Contracts

Air Waybill

143.As I have stated above, this purported to relate to the supply by Dobibat to Prince Faisal of  69 home appliances valued at HKD16,153. The only date on the document is 28 June 2011, 2 days after the defendant was arrested and  there was no attached invoice as stated in the waybill

Letter dated 18 April 2011 in relation the “ PASS” device.

144.The defendant stated that this related to a “Nano Pass” he had been developing and which he claimed was a unique device. He asserted that this was “the dream of his life” and would make him “the richest man in the world”.

145.The letter which is in English, purports to come from His Royal Highness Prince “Mansour Bin Soltan Bin Abdulaziz AL Soud” and congratulates the defendant on the sophisticated technology and looks forward to the defendant quickly sending an “agreement monopoly agency”.

146.The defendant claimed the device took a year to develop at a cost of RMB 1million. He claimed that with the letter from the prince was an e-mail asking for certain modifications. The defendant claimed that the modifications were very easy to make.

147.No other evidence of the existence of this product were produced. No e-mails were produced. The defendant said that this project did not continue because he was arrested and he could trust noon e else with it. The defendant claimed that his business ground to a halt after he was arrested. I noted that the defendant was released from custody in October 2011.

Transport Agreement dated 15 April 2011 between the defendant’s four companies and Shenzhen Wuzhou

148.This document purported to be an agreement between the defendant’s four companies and Shenzhen Wuzhou.

149.The terms are vague. They include phrases such as the arrangement was in order to “building safe, believing and win-win cooperation relationship”. I also noted it bore the Dolibat chop without the “e” after the “p” in “Development” almost one year after the name of the company had been altered.

Railway Scrap Metal Memorandum dated 5July 2011

150.This purported to relate to the sale of railway scrap metal worth in excess of USD400 million. The parties to the memorandum were St. Engineering SRL, Baosteel and Ibat is referred to as a third party.

151.There was no indication from the document produced as to what role Ibat was to play. There was no other supporting documentation.

152.In assessing this evidence, I took into account that there would inevitably be different business practices between persons coming from different parts of the world. I had no doubt that all these documents were sham documents. I was sure that they were produced by the defendant to create the misleading impression that he was a businessman of substance.

Knowledge of the defendant

153.Notwithstanding the clear record of the defendant, I found him to be a glib and resourceful liar. I was sure that the documentation he produced to support his proposition the he was involved in substantial international commercial trade was false.

154.The fact that I rejected the evidence of the defendant does not mean he is guilty of the offence. He accepted that he presented P2 at the Bank on 28 April 2010. The name of the payee did not match the company name of Dolibat in that the word Development in the company name of the payee had an extra “e”. Rather than get an amended draft, the defendant had the company name changed. Spelling mistakes in cheques and similar documents cannot be uncommon. According to PW2, a branch manager of the Bank, who had been with the bank since 2004, he had not previously come across a situation where a customer had changed the name of the company so as to correspond with the name of the payee on the financial instrument. As a matter of common sense, were this to be done, the draft would not bear the name of the company as it was when the draft was issued.

155.Another problem that would arise by taking such a course, is that there would be problems with existing contracts, company stationary and corporate paraphernalia. An example of this, was the use of the original corporate authorized signatory chop on the purported Dolibat/ Shezhen Wuzhou agreement dated 15 April 2011 (D11), nearly one year after the name of the company had been changed.

156.The defendant claimed in evidence that he received the draft by DHL delivery, D7. He told the police in interview that he received it personally from Ahmed. In evidence he tried to make out that the what was contained in the record of interview was as a result of misunderstanding or mistranslation. I noted that from counter 1520 onwards he was asked about P2. He was asked about the company that issued P2. The defendant explained that Assad Said was the owner of the company which issued P2. When asked who the contact person was, the defendant gave the name of the Ahmed and said he was the financial manager of the company (1563). I noted that the words recorded at 1563 were actually spoken by the defendant in English. The defendant said that Ahmed  “come here with the ship”. When asked who it was that actually gave him P2 he again answered the question himself at 1574 and said “Ahmed”.

157.The significance of this discrepancy was increased by the evidence of  the defendant that Ahmed arrived in Hong Kong on 29 April 2010, the day after D1 presented P2 at the Bank.

158.With regard to the defendant’s suggestion that there may have been some misunderstandings during the interview with the police brought about by problems of translation, I noted during the course of the trial that the defendant frequently used English. He started to give many of his answers in English and before there had been any translation of the questions. Many of the documents he produced were in English. He said that he had attended a course in England which he said had been conducted in English.

159.PW1, the Bank staff who saw the defendant and Xiao on 28 April, said that she was handed the bank opening documents and P2 separately. She said that she did not notice the misspelling on P2. She denied that she had noticed the misspelling and that subsequently she had gone to lunch with the defendant and Xiao and discussed ways in which the problem might be resolved: either by obtaining an amended draft or changing the company name.

160.PW1 said that after she had handed the documentation to her colleagues it was later returned to her by them and they pointed out the discrepancy in the spelling. She said that in the late afternoon she rang Xiao, spoke to her in Putonghua, and told her that the matter could not proceed because of the problem with the draft.

161.PW1 said that she could not recall that whilst at the  bank on 28 April Xiao had made a telephone call because PW1 had told her about the problem with P2. PW1 said that as all this happened two years ago, she could not recall discussing with the defendant and Xiao ways in which the problem could be resolved by, inter alia, changing the company name.

162.When the defendant gave evidence about his dealings with PW1, I noted that his evidence was very different to the case put to PW1. He said that he and Xiao did go for lunch with PW1 but that there was no discussion about P2 at that lunch. The defendant said that after lunch, PW1 called Xiao and told her about the spelling problem with P2 and that they should return to the bank the following day and take with them the Dolibat stamp. The defendant said that they returned to the bank the next day and spoke with PW1. The defendant said that it was on that occasion that PW1 explained to them that there were two options: either to change the name of the company or obtain a fresh draft. The defendant said that this conversation took place on the morning of the 29 April.

163.I took into account that Dolibat  and the other three Hong Kong companies of which the defendant and Xiao were equal shareholders and directors all used the same false registered address. I took into account that Xing Hong, the corporate secretary of the four registered companies ( Admitted Fact 10) was also registered at that same false address.

164.The defendant had submitted P2 to the Bank for encashment.  I was satisfied P2 is a false document. I was sure that the defendant lied about the circumstances in which he came into possession of  P2. I was sure that there was no genuine underlying commercial transaction to account for the defendant’s possession of P2. I was sure that the documentation produced by the defendant to support his contention that he was an international businessman of substance was a false. I bore in mind that the fact that I rejected the evidence of the defendant did not mean he is guilty of the offence.

165.However, having considered all the circumstances, I had no doubt that  P2 is a false instrument within the meaning of s.69 of the  Crimes Ordinance Cap 200. I was sure that when the defendant presented P2 to the Bank on 28 April 2010 he did so knowing it was a false instrument. I was sure that P2 was intentionally and dishonestly used by the defendant. I was sure that the defendant presented P2 to the Bank with the intention of inducing the staff of the bank to accept is as genuine and by so accepting it, to do an act to the prejudice of the Bank.

166.I therefore convicted the defendant of the offence charged.

Please refer to CACC165/2012 for the relevant appeal(s) to the Court of Appeal.