Far East trio acquitted; case referred to SFC
A judge yesterday referred Far East Holdings, the listed company backed by the family of tycoon Deacon Chiu Te-ken, to the securities watchdog over what he termed poor and sloppy governance after acquitting former managing director Duncan Chiu and two other senior staff of stealing HK$61 million from it.
Duncan Chiu, 37, who is Deacon Chiu's youngest son and was also chief executive officer, was found not guilty in the District Court of charges of theft, conspiracy to defraud and making transactions favouring a company director.
Lui Hung-kwong, 52, the former company secretary and financial controller of the locally listed financial and property investment company, and Wendy Yung Kim-bing, 52, former personal assistant to Deacon Chiu and senior investment manager, were acquitted of similar charges.
Duncan Chiu, Lui and Yung had been accused of transferring sums of HK$15 million, HK$5 million and HK$41 million on three separate occasions in 2007 from the company's account to Deacon Chiu's account for personal investment without proper approval or written records. The chairman earned HK$974,000 on investments and eventually returned HK$62.1 million to the company.
Acquitting the trio, Judge Frankie Yiu Fun-che said he could not be sure they had conspired to transfer the company's funds dishonestly to the chairman's account.
But he added: 'This is quite an example [of] how easily a family-controlled ... listed company [can] be manipulated without any transparency or information given to the minority or public investors.'
He said he would refer the matter to Securities and Futures Commission and other authorities.
Duncan Chiu said the money was transferred to the account of his father, the former ATV chairman, for initial public offering subscriptions, as his celebrity status would help Far East gain a bigger allotment of shares.
Yiu rejected his explanation, saying it was 'less than compelling' and asking why Far East itself, as a publicly listed company, would be less reputable or prominent than the chairman. He also said it was 'surprising' that Duncan Chiu, who joined Far East in 1996 and was appointed to a senior position in 2003, had never thought of obtaining a board resolution for money to be transferred out of the company to a private account.
But he said the prosecution had failed to prove the charges beyond all reasonable doubt.
He said the trio, as controlling shareholders, did not make a quick profit through the subscription and sale of shares but pointed out that nobody could be sure of a win and that if Chiu had suffered a loss, it could not simply be returned to the company.
'It appears [as] if the whole exercise is for private investment,' Yiu said. 'It might bring more trouble than good.'
A Securities and Futures Commission spokeswoman said it would not comment on an individual case. Far East had no comment.
The amount returned to the company by the chairman on top of what he borrowed for 'private investment'