Community service order over letter spreading AIA rumours

PUBLISHED : Tuesday, 05 May, 2009, 12:00am
UPDATED : Tuesday, 05 May, 2009, 12:00am

A former MassMutual Asia executive was ordered yesterday to perform 120 hours of community service for giving his subordinate a copy of a forged letter that spread rumours that insurance giant American International Assurance (AIA) was in trouble.

Eastern Court acting Principal Magistrate Bina Chainrai also ordered Chen Han-siang to pay costs of HK$1,000. Chen, 46, earlier pleaded guilty to one count of using a copy of a false instrument.

The court heard that the forgery was passed to four other people.

In a previous hearing, the prosecutor detailed how the forged letter, purportedly issued by AIA's customer services department, had advised customers to apply to surrender their insurance policies before September 26, otherwise they might not receive a refund of the principal and bonus of their policies. The incident took place on September 23 as news reports emerged that AIA's parent company, AIG, was in financial trouble. The letter caused chaos and forced AIA to state that it was fraudulent.

Chen, then a deputy general branch manager of MassMutual Asia, was well aware of the fraudulent content by the time he gave the letter to his subordinate, Sin Kin-tong, the court heard. On that morning, Wong Hoi-pang, director of MassMutual's agency office, expressly told his senior management subordinates in a meeting, including Chen, that the content was false.

After the meeting, Chen handed a copy to Mr Sin and said AIA was 'in great trouble'. Believing Chen, Mr Sin immediately made photocopies and faxed them to two clients. He also faxed a copy to his wife, who was also a MassMutual insurance agent. His wife later passed a copy to an AIA insurance agent for confirmation.

Eventually, the letter reached the vice-president and general counsel of the law department of AIA Company (Bermuda), who confirmed that their company had not issued it.

Chen had told his subordinate later on the day of the offence that the letter was false and told him not to mention it to anyone, but it had already been faxed to the two clients, the court heard.

In sentencing, Ms Chainrai said the offences were serious. But she considered that a community-service order was appropriate after considering Chen's genuine remorse and the positive comments shown in background and community reports.