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Former CY Leung adviser convicted of fraud

2020/7/17 — 18:50

Barry Cheung Chun-yuen

Barry Cheung Chun-yuen

Barry Cheung Chun-yuen, a former adviser to former Chief Executive Leung Chun-ying, was found guilty on Friday (17/7) of defrauding Hong Kong’s securities watchdog and cheating another company out of HK$30 million.

Widely regarded as one of Leung's top aides, Cheung, aged 61, was chairman of the now-defunct Hong Kong Mercantile Exchange (HKMEx), a commodities trading platform, between 2012 and 2013. In May 2013, the platform ceased to trade upon surrender of its authorisation to provide automated trading services. 

The District Court found Cheung, a former non-official member of the Executive Council, guilty of conspiring with Jacky Choi Tat-ying, former chief financial officer of HKMEx, to defraud the Securities and Futures Commission (SFC). The court also found Cheung guilty of fraud in relation to HK$30 million transferred from a company called Sinomax Finance into a business he owned.

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The prosecution had accused Cheung and Choi of conspiring, between May 2012 and May 2013, to hide the true financial position of the HKMEx and mislead the SFC into allowing it to keep its authorisation to offer automated trading services in the city.

Cheung was also accused of cheating Sinomax Finance out of HK$30 million for the benefit of New Effort Holdings, a firm wholly owned by him.

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Earlier Cheung had pleaded not guilty to both offences, while in November 2018 the other defendant Choi pleaded guilty to the offence of the conspiracy to defraud and became a prosecution witness. The sentencing for the two defendants has been adjourned to July 23.

In the judgement, District Judge Amanda Woodcock wrote that Cheung “has attempted to show that he was not hands-on and did not know or nor needed to know the minute details of the financial position of the [HKMEx] at relevant times. However, the evidence overwhelmingly suggests otherwise.”

“The income in the accounts was, subject to some low volume business, all brought in by the defendant on terms only the defendant was aware of,” the judge wrote. “That meant how long the money could stay in the account and how much had to be repaid and when was only known to him."

“It is inconceivable that [Cheung] was not aware if the [HKMEx] had sufficient funds to satisfy the SFC every Friday,” Woodcock wrote.

“I am sure he was fully in control of the finances as his main priority,”Woodcock said in the judgement.

The defence counsel for Cheung said the reason why his client committed the offences was he was stubborn, also because of “his firm belief of what [is] good for Hong Kong” and “his dedication in doing what he believed was good".

Cheung’s lawyer said Cheung “lost all his fortune and earned himself a bankruptcy order.” The lawyer also said Cheung had assumeddifferent public service positions, submitting 11 reference letters from people who know Cheung, including executive councillor Fanny Law Fan Chiu-fun and lawmaker Abraham Shek Lai-him, asking for leniency.

The defence lawyer for Cheung reiterated members of the exchange did not have any loss due to the case, which did not dent Hong Kong’s reputation as an international financial centre either.

The lawyer for Choi said in mitigation that his client pleaded guilty in 2018, and that he became a prosecution witness testifying against Cheung, which helped significantly the prosecution against Cheung.

Choi’s lawyer noted his client committed the offence because of his hope that the HKMEx could continue to operate, saying that Choi did not receive any wage in the 12 months prior to the end of his employment contract with the exchange, as Choi had trust in Cheung and believed all the things would become better eventually.

Cheung was a full-time adviser in the Central Policy Unit, revamped into the Policy Innovation and Co-ordination Office in 2018, before serving as a director of the Land Development Corporation, the predecessor of the Urban Renewal Authority (URA), in 1995. He served as URA’s chairman from 2007 to 2013, and founded the HKMEx in 2008 and became the trading platform’s chairman.

Cheung managed Leung’s campaign in the chief executive election in 2012. After Leung was elected as chief executive, Cheung was appointed as a non-official executive councillor, assuming a number of public services positions including a member of the Long Term Housing Strategy Steering Committee and the chairman of the Commission on Strategic Development.

In April 2013, the tenure of Cheung, dubbed the “king of public office”, as the URA chairman was extended by two years by the government, which came under fire for going beyond the “six-year rule”.

Cheung resigned from all public posts when HKMEx was being investigated in May 2013.

Source:
「頭號梁粉」張震遠涉串謀詐騙證監會、欺詐財務公司 兩罪罪成 / 立場報道

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