After the verdict, Leung, who has been on suspension from KPMG, huddled with friends and relatives who had filled the courtroom.

But he refused to comment to the media.

The judge also ruled Leung had to pay his own legal expenses because he had brought suspicion upon himself.

He received the HK$300,000 and kept the money at home for 11 days without reporting the incident to a more senior executive at his company or the ICAC.

Leung was a senior manager in the KPMG audit team that was helping to prepare a listing prospectus for Hontex, which raised HK$1 billion through an initial public offering in Hong Kong in 2009. The accounting statements in the prospectus were later found to be unreliable by the internal auditors committee at Hontex.

During the hearing, it was established that about two months after Hontex's listing on Christmas Eve in 2009, Chan, the Hontex consultant, called Leung and Lau and proposed meeting them separately in the lobby of their offices at Prince's Building in Central.

According to testimony, Chan first tried to give HK$100,000 to Lau, who refused it. Chan then approached Leung and forcibly stuffed HK$400,000 into his backpack. Leung later gave HK$100,000 to Lau, saying the money was 'generous lai see', but she later reported the incident to KPMG.

The judge said he concluded that Leung's behaviour after receiving the money on February 20 was 'stupid and irresponsible' and he was sceptical about why Leung had not reported the case to more senior partners or to the ICAC.

But the judge acquitted him of accepting bribes in part because of the behaviour of Leung's immediate supervisor, Money Chow.

Leung testified he had reported the cash offer to Chow on February 23, but that she only nodded her head and gave him no further advice or direction. During the court hearing, Chow said she had no memory of the meeting with Leung or the conversation.

'Money Chow is evasive and selective with the truth,' said Geiser. 'It was unacceptable for Money Chow to say that she has no impression on the meeting.'

The judge concluded that the meeting with Chow was important evidence. It showed that Leung had consulted his immediate supervisor about the cash payment and that her lack of guidance affected Leung's subsequent behaviour.

Meanwhile, the Hontex case remains in limbo.

A year ago, the Securities and Futures Commission suspended trading in Hontex shares and won a court order freezing HK$1 billion in IPO proceeds it had raised. The company's internal audit committee issued a statement last August that confirm the listing prospectus was not reliable and that investors should be compensated.

An SFC spokesman yesterday said it was still working on the case and could not comment whether shares of Hontex could resume trading or whether the HK$1 billion raised would be refunded to investors.

KPMG yesterday would not comment on whether Leung would be allowed to return to work.

Cleared

July 2009

Hontex consultant Chan Chau-wan tells KPMG senior manager Leung Sze-chit and his junior Suki Lau Shuk-ting that they will receive cash awards after the IPO.

December

Hontex IPO raises HK$1.08 billion. Shares make their debut on Christmas Eve, closing at HK$1.97, down 8.4 per cent from the offer price.

January 2010

Chan has lunch with Money Chow, a partner in KPMG?s audit work on Hontex and immediate boss of Leung. Chow later says Chan tried to give her a valuable present but she rejected it.

February 20

Chan meets Lau and Leung separately and gives HK$100,000 to Lau and HK$300,000 to Leung. Both reject it but Chan later puts the HK$400,000 in Leung?s bag. Leung then passes HK$100,000 to Lau and takes his HK$300,000 back home. Both try to return the money to Chan but fail.

February 23

Leung says in court that he had informed Chow that Chan gave money to him and Lau. Chow says she cannot recall the meeting with Leung that day.

February 24 to March 8

Lau reports the matter via a KPMG whistle-blower hotline. The risk management department of KPMG conducts an internal investigation and reports the case to the SFC which refers it to the ICAC. Leung is suspended.

March 30

SFC orders the suspension of Hontex shares. It also wins a court order to freeze HK$1 billion of Hontex IPO proceeds.

April

ICAC arrests Leung and charges him with two counts of corruption.

May

KMPG resigns as auditor of Hontex.

August

Hontex audit committee concludes that ?reliance cannot be placed upon the statements made in the company?s IPO prospectus? and the board concludes that investors in the company should be compensated.

March-April 2011

Hearing into the case at the District Court.

April 28

District Court judge Stephen Geiser acquits Leung of both charges, saying Chow?s evidence is not reliable. But the judge describes Leung?s behaviour as stupid and irresponsible and rules he must shoulder his legal costs.