The Court of First Instance has meted out jail terms for five people, including ex-Keen Lloyd Group chairman Chin Kam-chiu, for their roles in a $223-million letters of credit fraud involving the company.

Chin (alias Chun Kam-chiu), 46, was jailed for six-and-a-half years, while Sin Hua Bank's former deputy general manager Chow Wai-choi, 44, was jailed for five-and-a-half years.

Former manager of the group Tsang Siu-lan, 34, and Sin Hua Bank's former assistant general manager Hau Pui-yee (alias Hau Pui-ming), 53, and the bank's former senior branch manager Ma Kin-fai, 45, were each sentenced to four-and-a-half years.

Mr Justice Pang Kin-kee said the defendants each played a pivotal role in the fraud, which had put the bank at risk. The five were found guilty by a jury on one count of conspiracy to defraud.

The case arose from a complaint alleging Chun might have corruptly secured credit facilities from a bank. ICAC inquiries uncovered the conspiracy offence.

Conspiring together

The charge stated that between November 1, 1998, and April 30, 1999, the defendants conspired together and with others to defraud Sin Hua Bank, its shareholders and creditors by dishonestly:

* causing and permitting applications to be made to Sin Hua Bank by Keen Lloyd (Holdings) and Keen Lloyd Motors for the issue of letters of credit to finance the purported purchase of goods from a number of companies;

* causing and permitting the falsification of documentation required for the negotiation of the letters of credit; and,

* causing and permitting payments to be made to the beneficiary companies pursuant to the negotiation of the letters of credit.

The court heard that as a result, Sin Hua Bank released a total of US$28.78 million (about $223 million) under the letters of credit to the beneficiary companies. The sums were subsequently transferred to the Keen Lloyd Group bank account.

The court also heard the beneficiary companies were controlled by Keen Lloyd Group, while there were no genuine commercial transactions relating to the purchase of electrolytic copper cathodes or aluminium ingots as claimed in the 25 letters of credit involved in the scam.