A former executive director of publicly listed Kwong Hing International Holdings (Bermuda) Limited and a former executive director of a securities company were today convicted at District Court of bribery in relation to the purchase of Kwong Hing's shares and the publication of a research report of the listed company.

Li Man-tak, 38, a former executive director of Kwong Hing, and Nicholas Tan, 31, a former executive director of UBS AG, were found guilty of conspiracy to offer advantages to an agent.  Li was further convicted of a similar offence.

The judge adjourned the case to June 25, 2005 for mitigation, and remanded the defendants in custody.

The court heard that in July 2003, Li came to know Adrian Foo, at the time a fund manager of ING Investment Management Asia Pacific (HK) Limited, through Louis Lin and Vincent Yum.  Lin and Yum were then respectively a director and a senior vice president of SBI E2-Capital China Holdings Limited.

Share deal seals fate for conspirators

They agreed that Foo would use ING's fund to take up 15 million shares of Kwong Hing.

In return, Li would offer an advantage equivalent to the difference between the market price and $0.92 per share for 3.8 million shares of Kwong Hing, which was to be shared by Lin, Foo and Yum.

It was also agreed that Foo would use ING's fund to buy an additional 3.8 million shares of Kwong Hing, which Li would realise for paying the advantage.

Between August and December 2003, Li, on three separate occasions, paid Yum a total of about $1.8 million.

On February 25, 2004, Li, in the presence of Lin, gave Yum another $594,500, being the balance of the advantage, outside a parking complex in Central.

Total payments amounted to 2.39 million

After the trio were arrested, the $594,500 bribe payment was recovered from Yum.  A piece of paper recording the total bribe payments amounting to about $2.39 million was also seized from Lin.

The court also heard that in September 2003, Li asked Tan to write a favourable research report on the shares of Kwong Hing.

Li promised to pay an advantage, equivalent to the difference between the market price and $1.38 per share for 10 million shares of Kwong Hing.  The advantage was to be shared by Lin, Tan and Yum.

Through Yum, Li subsequently paid Tan $1 million as an advance payment.

On February 12, 2004, Tan caused UBS to publish a favourable report in relation to Kwong Hing shares.

Lin, 36, and Foo, 35, who earlier pleaded guilty to their respective roles in the case, have been remanded in custody and ordered to attend court on June 1 for mitigation.