The deputy manager of China Railway Construction (Hong Kong) Co., Ltd. was involved in defrauding the director of a construction company with a letter of credit of HK$75.3 million, and the director was involved in money laundering of more than HK$10 million. The two were arrested by the ICAC earlier and were convicted of conspiracy Convicted of fraud and money laundering, the case was sentenced in the District Court today (4th). When the two defendants pleaded for mercy, they said that neither of them had any personal benefit and that they had fully compensated the bank.
However, Deputy Judge Chan Wing-ho pointed out that this does not mean that the bank is not at risk because of this. He also pointed out that the fraudulent letter of credit has brought a blow to the financial market in Hong Kong. Considering the short time of the two crimes, no cross-border factors involved, and the background of the two , sentenced them to 4 years in prison.
The defendants, Wang Xiaoshan, 53, deputy general manager of China Railway Construction (Hong Kong) Co., Ltd.; and Liu Conghai, 55, director of the defunct Chengda Construction Engineering Co., Ltd., were convicted of one count of conspiracy to defraud. He was also charged with two counts of money laundering.
Chen Guan also banned Liu Cong from serving as a director of the company for six years.
In his plea for mercy, Wang revealed that his work performance had been praised by leaders and the state, and he hoped to return to his hometown as soon as possible to be reunited with his relatives; Liu came to Hong Kong from the mainland to run an engineering company, but his son in the mainland took Liu away due to mental disorder. mother killed.
The two companies signed an agreement to develop projects in 2016
According to the case, Wang was the deputy general manager of China Railway Construction Hong Kong at the time of the incident, responsible for business development, and Liu was the director of Chengda Construction.
Under Wang's arrangement, in September 2016, China Railway Construction Hong Kong signed a memorandum of understanding with Chengda and established a joint venture company to develop construction projects. Chengda asked China Railway Construction to assist in purchasing materials, and China Railway Construction agreed.
Set up a company as a purchasing assistant
In December of the same year, Wang arranged for Chengda to sign three more trade agreements with China Railway International Trading Hong Kong, making China Railway International Trading the purchasing agent of Chengda to purchase building materials from suppliers for three construction projects. Payment by letter of credit held at DBS Bank.
DBS Bank has approved a payment of 75.3 million
China Railway International Trading submitted three L/C applications to DBS Bank in January 2017 with suppliers as beneficiaries, and between January and March of the same year, Liu submitted documents to prove the relevant procurement transactions, including invoices for construction materials, packaging Packing List and Shipping Receipt, etc.
DBS therefore approved the application and issued three letters of credit to the supplier totalling $75.3 million.
The ICAC finds that the procurement did not exist
The ICAC later found that the procurement did not exist. The memorandum of understanding and the three trade agreements were signed under the arrangement of Wang. Liu also dealt with HK$10.5 million from the above-mentioned fraud.
Case No.: DCCC 652/2020, DCCC 79/2021
China Railway Construction Hong Kong executives convicted of defrauding 75.3 million yuan in letter of credit conspiracy to defraud
The marching team is called China Railway Construction