Lily Chiang allegedly hid share grant
High-profile businesswoman Lily Chiang Lai-lei, on trial for fraud, was accused yesterday of concealing from a potential buyer of her company a share option that would have diluted the buyer's share.
Chiang, former chairwoman of the General Chamber of Commerce, allegedly kept from Mega Land, the potential buyer, that the board of directors of Chiang's Pacific Challenge Holdings had approved a grant of share options as the takeover was being negotiated in 2001.
Seller Super Drive, of which Chiang was a majority shareholder, and Mega Land agreed to the deal. But the Securities and Futures Commission rejected it and it fell through, the District Court heard.
Chiang, 50; Tahir Hussain Shah, 45; and Pau Kwok-ping, 54, former chief executive of Eco-Tek Holdings, are on trial in the court on fraud charges brought by the Independent Commission Against Corruption.
Prosecutors say Chiang instructed her employees to hold shares for her and concealed her ownership of them from shareholders, the SFC and the stock exchange. The alleged offences took place between January and December 2001, and between February and August 2002.
Chiang denied the alleged concealment. She referred to an undated letter sent to Mega Land that purportedly notified the purchaser of the share option. However, prosecutor Simon Westbrook SC said the undated letter could have been sent out months after the grant took place.
Chiang said she notified the company by phone and letter shortly after she was told of the share option.
When asked why Pacific Challenge Holdings' public announcement made no mention of the share option, Chiang said: 'I would not be able to know ... The corporate finance department of the company would analyse what was to be disclosed in the announcement and what not. But I don't think they would conceal anything.'
