18 October, 2015
Hong Kong – Ex-Chairman Of Listed Company Sentenced to Three Years For HKD 1M Bribery Over Acquisition
On 25 September 2015, the former chairman of ABC Communications (Holdings) Limited (ABC), was sentenced to three years imprisonment after being convicted of accepting a HKD 1 million bribe for procuring ABC to acquire an investment company. Chen Jiasong, 60, was found guilty of one count of accepting an advantage as an agent, contrary to Section 9(1)(a) of the Prevention of Bribery Ordinance (POBO). Judge Fred Sham Siu-man also ordered Jiasong to pay a restitution of HKD 1 million to ABC, and disqualified him from being a company director for five years.
ABC is a Hong Kong-listed company providing financial services, wireless application development and mining operations. At the material time, Jiasong was the deputy chairman of ABC and Chen Xirong was the owner of Gold Vast Holdings Limited (Gold Vast). In October 2009, Jiasong recommended that ABC's board acquire all shares of Gold Vast from Chen Xirong. The board approved, and Jiasong, through a wholly owned subsidiary of ABC, Global Force, signed a framework agreement for the acquisition of Gold Vast at a consideration not exceeding HKD1,300 million.
Shortly afterwards, Jiasong, on behalf of ABC and Global Force, signed an agreement with Chen Xirong for the acquisition of Gold Vast for HKD380 million. Evidence showed that Chen Xirong later withdrew HKD 1 million cash from his bank account which was deposited into Jiasong's bank account the same day.
SECOND APPEAL FOR FORMER TVB GENERAL MANAGER
Further to previous updates on this case, Stephen Chan Chi-wan, now chief advisor of Commercial Radio, recently faced the second appeal in relation to his acquittals on private sector bribery charges in 2011 and 2013.
Chan received a HKD 112,000 (US$14,450) payment from Olympian City to host a live talk show held at the mall in 2009 while he was general manager of Television Broadcasts (TVB), without TVB's permission. He was tried and acquitted twice by the same judge in the District Court on the basis that he had a "reasonable excuse"; namely that TVB had "silently agreed".
The prosecution applied to reopen the case on the basis that the trial judge erred in finding a "reasonable excuse" without objective evidence. The Court of Appeal allowed the application in August 2014 and the case was heard for two days in September 2015. The prosecution argued that the trial judge failed to consider whether the show related to TVB's business (as previously ruled by the Court of Appeal) when determining whether Chan had dishonest intent and a conflict of interest in receiving the payments without TVB's permission. The defence argued that Chan had always been permitted by his superiors to attend such shows and that Chan hosted the show as a guest of the mall, not as a TVB employee. The judgment is awaited with interest.
MACAU CASINO JUNKET FIGURE – CASE ADJOURNED
As previously reported, in August 2015, Hong Kong police charged Cheung Chi-tai with laundering HKD 1.8 billion (US$231 million). See our earlier report for more detail. In late September, the court adjourned Cheung's trial until 24 March 2016, to give Hong Kong authorities time to cooperate with Macau officials and disentangle some of the complex issues involved.
For further information, please contact:
Kyle Wombolt, Partner, Herbert Smith Freehills
kyle.wombolt@hsf.com
