Former Hong Kong legislator Chim Pui-chung has been sentenced to 34 months in jail after he and his son were convicted of conspiracy to defraud a listed company and the stock exchange.
District Judge Ernest Lin also jailed the son, Ricky Chim for three years and one month for the same offence on Monday, local media reported.
The father, 78, and the son, 55, were found guilty in December last year of two counts of conspiracy to defraud.
In his verdict last December, Lin said the offences stemmed from a secret “backdoor listing” agreement involving the two pair and fugitive businessman Ma Zhonghong.
Ma was said to have negotiated with the father and son duo that he would pay HK$210 million in exchange for control of 70 to 75 per cent of the Asia Resources Holdings stocks between July 2013 and November 2015.
At the time, Chim Pui-chung was the largest shareholder of Asia Resources, while his son was the chairman of the listed company.
According to Lin, this kind of shell acquisition transaction was common in the financial market and not illegal in itself. But the accused had hidden the deal from the company’s board of directors and the Hong Kong Stock Exchange (HKEX).
Ricky Chim did not disclose the real purposes for issuing convertible bonds at two board meetings he chaired in late July and early August 2013, Lin wrote in his judgement. The board eventually passed the resolution without taking into all relevant factors, the judge said.
The case involved a third defendant, Wong Poe-lai, who was a former employee of Ma.
The 68-year-old was jailed for two years for one count of money laundering, after Lin ruled that she had handled crime proceeds of around HK$42 million. The money came from convertible notes issued by Asia Resources.
The former lawmaker and his son were charged in November 2021 by the Independent Commission Against Corruption (ICAC) following a complaint referred by the Securities and Futures Commission.
In a statement issued on Monday, the ICAC said the district judge criticised the defendants for “undermining Hong Kong’s reputation as a financial centre.”
Chim Pui-chung was described as the “instigator of the scam,” while his son abused his official capacity.
The ICAC also said it had filed for a confiscation order with the District Court, adding that it “would spare no effort in recovering the crime proceeds concerned.”
