Jeweller and son convicted of fraud
Five senior officers of TSL empire guilty of eight conspiracy counts, judge rules
Tse Sui-luen, founder of the listed Tse Sui Luen Jewellery (TSL) empire, and four others, including his son, were found guilty yesterday of paying illegal rebates to travel agencies for bringing customers to the company's showrooms.
On the 100th day of a marathon District Court hearing, Judge Kevin Browne convicted the five defendants - all members of TSL's top management - on eight conspiracy charges to which they had pleaded not guilty in August.
The offences included conspiracy to commit false accounting, offer illegal advantages, theft and defraud the Inland Revenue Department.
Following the convictions, Tse Sui-luen, 70, his son Tommy Tse Tat-fung, 38, finance director Chung Yuen-ling, 45, deputy chairman and chief executive Peter Gerardus Van Weerdenburg, 47, and business promotions general manager Wong Ting-fong, 59, were remanded in custody.
The court heard a scheme codenamed 'the James Bond Project' by the culprits had seen TSL offer about HK$170 million in illegal rebates to travel agents between 1996 and 2005.
The payments were made through offshore companies set up for the purpose of channelling the money out of Hong Kong before remitting it to local travel agents in order to avoid tax.
Judge Browne said in his verdict that 'lies had become the corporate policy after the scheme was introduced'. The defendants implemented the scheme to sustain the business by luring more tours to visit the company's showrooms - the business of which formed a significant part of the company's annual turnover.
The judge found Tommy Tse and Van Weerdenburg guilty of conspiring to defraud the Inland Revenue Department by making false representations during its investigations into TSL's commission payments. The pair had claimed the money was paid for business promotion services provided to TSL by unrelated overseas promoters.
Tse Sui-luen and Tommy Tse were also found to have conspired with others to steal HK$500,000 and HK$2.714 million, respectively, from the company between February and December 2002 for their own use. The money stolen was covered up by bonus payments purportedly paid to other employees.
The court had heard that the theft came to light when Tommy Tse decided to disclose his misappropriation of 2 million yuan to a TSL board meeting on December 18, 2002. He revealed at the meeting that the money had come from cash set aside for travel agents' commissions.
The day after the meeting, the board decided to accept his resignation and terminated the consultancy agreement between the company and Tse Sui-luen. On January 8, 2003, Tommy Tse returned HK$1.821 million to TSL via his lawyer.
Having delivered half of a more than 200-page judgment, Judge Browne will continue outlining the reasons for his verdict today. He said a hearing would be held on May 6 for pleas of mitigation from the defence.
A solicitor acting for Tse Sui-luen told the press outside court yesterday that his client would appeal.