Banking: customers bribed bankers, bankers laundered bribe money, says HK ICAC

ICAC - like other Hong Kong prosecuting authorities - has been reluctant to tag money laundering charges onto easy-win charge sheets. The reasons are complex:

first, advice given to prosecutors almost a decade ago undermined many prospective cases. But that advice was based on an English case which has since been, in effect, discredited by the passing of legislation that had the effect of reversing its decision. But HK, without the benefit of that legislation, considered itself bound by the old case.But prosecutors have been chafing at the bit to test the case and although the current case will not entirely cover the same ground, it is making headway towards it.

Secondly, unlike the USA which tags money laundering charges onto almost any case, Hong Kong follows the more prudent path followed by many other countries: money laundering is expensive and difficult to prove and if the same result can be obtained without that expense and complexity, then it is a sensible use of public resources to do so.

But the current case is different: the money laundering charges may be easier to prove than the primary charges. If so, the case will test the Court's willingness to entertain a money laundering case based on "knew or believed the moneys to be proceeds of an indictable offence." I.e. conviction on a money laundering charge even if the defendant is acquitted on the primary charge.

The defendants are Derick Chan Po-fui, 50, Head of Corporate Banking Department of publicly listed Industrial and Commercial Bank of China (Asia) Limited (ICBC (Asia)); Chan Yick-yiu, 43, former Head of Real Estate and Finance of ICBC (Asia); and Zeng Wei, 47, major shareholder-cum-director of United Win Holdings Limited.

According to ICAC "One of the charges alleged that Derick Chan accepted a bribe of HKD1 million from Zeng as a reward for assisting in extending the repayment due dates of the loans owed by Zeng and/or his companies to ICBC (Asia).

Another charge alleged Derick Chan of accepting another bribe of HKD2.3 million from Zeng for the same reason. Zeng was alleged to have offered the bribe of HKD2.3 million to Derick Chan.

Derick Chan faced another charge of conspiring together with Zeng and others to deal with the above $1 million, knowing that it represented the proceeds of an indictable offence.

Another charge alleged Derick Chan and Zeng of conspiring together with others to deal with the above $2.3 million, knowing that it represented the proceeds of an indictable offence.

Chan Yick-yiu faced two other bribery charges, which alleged that he accepted HKD500,000 and HKD2 million from Zeng as rewards for assisting Zeng and/or his companies in preparing for credit proposals in relation to their loan applications to ICBC (Asia).

The remaining two charges alleged Chan Yick-yiu of conspiring together with Zeng and others to deal with the bribes of HKD500,000 and HKD2 million, knowing that they represented the proceeds of an indictable offence."

The three charged are amongst six people arrested by ICAC recently.

They appeared in court yesterday. No pleas were entered. All were bailed on conditions including surrender of their travel documents. ICAC emphasises that ICBC (Asia) has co-operated fully in the investigation.