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Harvey Kong

Former Hong Kong lawmaker Chim Pui-chung and his son have been remanded in custody after being found guilty of conspiracy to defraud over transactions related to a publicly listed company almost a decade ago.
A District Court judge on Monday revoked the bail of Chim, 78, and son Ricky Chim Kim-lun, 55, after delivering the guilty verdict. The elder Chim represented the financial services sector in the Legislative Council between 2004 and 2012.
Businesswoman Wong Poe-lai, 68, was convicted of money laundering in the same case.
Judge Ernest Lin Kam-hung handed his 104-page judgment to the trio’s lawyers and postponed the court session for an hour to allow them to discuss their course of action.
All three defendants were remanded in custody.
Among those in the public gallery on Friday were lawmaker Paul Tse Wai-chun and veteran political activist Tsang Kin-shing, also known as “the Bull”. Tse was seen speaking to both Chims before the verdict was handed down.
The court earlier heard that merchant Ma Zhonghong, an associate of Wong’s, conspired with the Chims and other unidentified people to commit fraud by concealing his agreement to pay HK$210 million (US$27 million) to the duo to gain control of between 70 per cent and 75 per cent of Hong Kong-listed Asia Resources Holdings.

Ma made the payments between July 2013 and November 2015 for the stake in the manufacturer of pharmaceutical and healthcare products.
In 2022, a judge issued a warrant for Ma’s arrest after he failed to report to police and attend court.
Former lawmaker Chim was a substantial shareholder in the company, while his son served as its chairman between 2008 and 2014.
The deal constituted a back door listing because it denied the stock exchange and other shareholders of the opportunity to scrutinise the transaction, according to the city’s anti-corruption agency.
Wong and Ma were charged with money laundering for handling HK$42 million in proceeds from a placement of convertible notes issued by Asia Resources, considered the proceeds of an indictable offence.
Lin said the elder Chim used his power as the largest shareholder of Asia Resources to arrange for his son to become the firm’s chairman and executive director, as well as to enter into the deal with Ma and others.
“The co-conspirators in this case were in cahoots, they used their own financial skills to sell a listed company as if it was a piece of private property for their own personal gain,” Lin wrote in his judgment.
“The victims of their actions were not only Asia Resources, but also the small shareholders of the company. They were not only denied the choice of a mandatory offer, their personal investments also became someone else’s tools for financial gain.”

He said that although transactions involving shell companies were not illegal and did not have to be reported to the stock exchange, the way in which the payments were made meant the company’s board could not act accordingly to protect the interests of small shareholders, leading to losses.
The actions also meant the listing division of Hong Kong’s stock exchange could not carry out its duties to the public.
Lin noted businesswoman Wong, who was said to be working for Ma at the time, should have realised the assets involved in the case came from illegitimate sources and that she was handling them abnormally.
The judge said this explained her decision to give false information, fabricate details about her own financial status and provide an incorrect address.
“These are all attempts to make it impossible for outsiders to rely solely on a paper trail to link the handling of the convertible notes, the exchange of shares and the funds involved with Ma and herself. The third defendant [Wong] also profited in the process” he wrote.
Lin said the “only possible explanation” for Wong’s behaviour was that she had reason to believe the assets she handled came from illegal means.
In 1998, Chim was sentenced to three years’ jail, reduced to 12 months on appeal, for plotting to forge share-transfer documents. Monday’s hearing also revealed that the former legislator had three convictions before 1998.
Responding to the ruling, a spokesman for the Independent Commission Against Corruption said it would continue its close collaboration with regulators to fight corruption and crime involving listed companies, as well as enhance their corporate governance.


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Former Hong Kong lawmaker Chim Pui-chung and son found guilty of fraud

Chim Pui-chung represented the financial services sector in the Legislative Council between 2004 and 2012. Photo: Sam Tsang

Ricky Chim Kim-lun was the chairman of Asia Resources Holdings. Photo: Bruce Yan

A judge has said businesswoman Wong Poe-lai should have realised the assets involved in the case came from illegitimate sources. Photo: Brian Wong

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News

Hong Kong

Law and Crime

Businesswoman Wong Poe-lai also convicted of money laundering in case over fraudulent transactions tied to listed firm


Businesswoman Wong Poe-lai also convicted of money laundering in case over fraudulent transactions tied to listed firm.


Crime in Hong Kong

ICAC