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The former chairman of a tobacco manufacturer and two people from another company who were earlier jailed for bribery and fraud over cigarette smuggling activities, were today ordered to pay more than $13 million in restitution to the tobacco company.
District Court Judge Joseph Yau earlier sentenced Lu Dayong, 62, the former chairman of Nanyang Brothers Tobacco Company Limited, to four and a half years in prison in his absence. Lu had fled the city and failed to turn up for the trial in June last year. The court issued a warrant for his arrest.
In February, the judge had jailed Ko Kit, 40, a director of Hang Chun Trade Development Limited, for three and a half years. Chan Kai-san, 41, a sales manager for the company, was jailed for two years.
Judge Yau today allowed the prosecution's application and ordered Lu and Ko to pay $7.55 million in restitution to Nanyang Brothers. The judge also ordered Lu, Ko and Chan to pay the company a restitution of over $5.73 million.
The judge also allowed the prosecution's application for court costs against Lu.
Lu and Ko were earlier convicted of one count of conspiracy for an agent to accept an advantage from a cigarette trader, Golden Leaf International Development (Hong Kong) Limited. Lu, Ko and Chan were found guilty of one count of conspiracy to defraud Nanyang Brothers.
Cigarettes smuggled into Mainland
Nanyang Brothers, a subsidiary of publicly listed Shanghai Industrial Holdings Limited, manufactured the Double Happiness brand of cigarettes in Hong Kong. As then-chairman of the company, Lu approved Hang Chun and Golden Leaf as overseas distributors. Nanyang Brothers subsequently sold $48 million worth of cigarettes to Hang Chun.
Lu and Ko received $7.55 million in illegal commissions from two directors and shareholders of Golden Leaf between January 2003 and February 2004 as rewards for causing Nanyang Brothers to sell Double Happiness cigarettes worth $42 million to Golden Leaf.
The cigarettes sold to Hang Chun and Golden Leaf were prohibited from sales in the Mainland, but had been smuggled to the Mainland through places including the Philippines and Vietnam.
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