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Accountant sent to jail for insider dealing

A former accountancy manager at property developer Chinese Estates Holdings has been jailed for eight months for insider dealing in shares of Chi Cheung Investments ahead of an asset swap deal two years ago.

Eastern Magistrate's court yesterday sentenced Andy Lam King-hung and ordered him to pay a fine of HK$130,000 and investigation costs of HK$54,394.

Lam, who pleaded guilty last month, was convicted of two criminal charges of insider dealing. His wife, Fung Lai-sha, who was also charged, was acquitted.

The court heard that Lam, in August 2007 when he was an accountant at a subsidiary of Chinese Estates, learned about the proposed asset swap transaction between Chinese Estates and Chi Cheung before the deal was made public.

Lam placed orders in his securities accounts and those of his wife to buy Chi Cheung shares before the proposal was announced publicly.

The share price of Chi Cheung surged 30 per cent after the plan was announced, bringing Lam and his wife a combined profit of HK$209,000.

This is the second insider dealing case resulting in immediate jail terms for those sentenced. Earlier this month, a District Court judge sentenced former BNP Paribas Peregrine Capital vice-president Ma Hon-yeung to 26 months' imprisonment and his girlfriend, Ivy Lo Yuk-wah, to 12-month jail term for insider dealing of Egana Jewellery & Pearls before its privatisation in 2006.

'This is the seventh person convicted of criminal insider dealing since June 2008 and the second case in which the court has imposed an immediate jail sentence,' said Mark Steward, executive director of enforcement at the Securities and Futures Commission, which investigates and prosecutes insider dealing.

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