A former Kwong Hing International Holdings executive director and three people have been jailed for a bribery scam relating to the purchase of the listed company's shares.

Li Man-tak, 37, former Kwong Hing Executive Director, was sentenced to three years' imprisonment.

Three other co-defendants - former UBS executive director Nicholas Tan, 31, former SBI E2-Capital China Holdings director Louis Lin, 35, and former ING Investment Management Asia Pacific fund manager Adrian Foo, 34, - were each jailed for two years.

The court also ordered Lin, Foo and Tan to forfeit bribe money in the sums of $591,000, $1.2 million and $800,000.

Deterrent sentences needed 

In sentencing, Judge Sweeney said this case, involving insider dealing, was difficult to detect, and the court had to impose deterrent sentences to maintain a level playing field in the financial market.

Li and Tan were earlier found guilty on one count of conspiracy to offer advantages to an agent, while Li was further convicted of a similar offence.

Lin and Foo had pleaded guilty to one joint charge of conspiracy to offer advantages to an agent. Lin also pleaded guilty to a similar offence, while Foo admitted one count of accepting an advantage as an agent.

The court heard that in July 2003, Li came to know Foo, who was then a fund manager of ING, through Lin and Vincent Yum, who were then a director and a senior vice president of SBI E2.

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, the court heard.

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.

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

Favourable research report sought

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

Li promised to pay an advantage, equal 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, Foo, Tan and Yum.

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