The District Court has jailed former Wealthmark International chairman Wong Chor-wo for six years for submitting false statements to auditors for covering up the misappropriation of $20.8 million in company funds. His cousin Wong Chun-ping was imprisoned for three years.

On Wednesday, former chairman Wong, 54, was found guilty of seven counts of theft, four of furnishing false information, three of using false instruments, one of using copies of false instruments, one of an officer of a company knowingly making a false statement to the auditors, and one of publishing a false statement.

His 50-year-old cousin was convicted of two counts of dealing with property known or believed to represent proceeds of an indictable offence.

Deputy Judge Adriana Tse today said the offences Wong Chor-wo committed constitute a serious breach of trust, damaging Hong Kong's reputation as a financial centre.

Since 1987 Wong Chor-wo has operated Wallmark Enterprise Company, which later became a subsidiary of Wealthmark. Between February 16 and March 21, 2001, he stole $20.8 million from Wallmark.

To cover up the misappropriation, he produced four false receipts between February 19 and March 26, 2001 when furnishing information for making entries in Wealthmark accounts.

The false receipts, issued by a Mainland construction company, purported to show that it had received over 22 million renminbi as a deposit and construction fees for a project in Huizhou.

When confronted by the listed company's auditors, Wong Chor-wo used false documents or copies of false documents to cover up the scam.

On April 24, 2002, he submitted a false statement to the auditors claiming there was a meeting of the Wealthmark Board of Directors in which it was resolved that an arrangement with CK Trading Company and Wong Chun-ping had been approved. The company was operated by Wong Chun-ping and his wife.

On the same day, Wong Chor-wo published a false written statement in Wealthmark's annual report, stating the net proceeds of the initial first offer of Wealthmark's shares were used for various purposes in relation to Wealthmark's business.

The court also heard between February 16 and March 22, 2001, Wong Chun-ping had dealt with two sums of $4 million and $16.8 million, which represented the funds stolen from Wallmark.