The business star who fell from grace

PUBLISHED : Friday, 10 June, 2011, 12:00am
UPDATED : Friday, 10 June, 2011, 12:00am

Share

Lily Chiang Lai-lei, now headed for jail, was once considered one of the city's most successful businesswomen.

She is the fourth daughter of industrialist Chiang Chen, who founded Chen Hsong Holdings and was known as 'King of Plastic Machines'.

Her father, who arrived alone in Hong Kong from the mainland in 1949 with only four years of formal education, turned a US$200 machine shop into the world's largest manufacturer of injection moulding equipment. He is also a major philanthropist, with enormous donations made in Hong Kong and the mainland.

Lily Chiang went to the United States on a scholarship when she was 13 and completed a degree in mechanical engineering before she was 20. Soon after returning to Hong Kong, she obtained a PhD in mechanical engineering at Polytechnic University. She helped modernise her father's company by completing the automation of its warehousing and administrative system.

In 1999, she founded Eco-Tek, an environment-protection company listed on the Growth Enterprise Market. The same year she was named one of Hong Kong's Ten Outstanding Young People.

Controversy flared two years later, when Kistefos Investment, a Norwegian shareholder, took legal action against Pacific Challenge Holdings, a company involved in corporate finance and stock trading of which Chiang had become chairwoman. Kistefos alleged improprieties in several deals, including one it claimed was 'an attempt by Chiang to siphon away the cash assets of the company for her own benefit'.

This led the Securities and Futures Commission to investigate whether Chiang; Pau Kwok-ping, former chief executive of Eco-Tek Holdings; and another investor, Anthony Cham Wai-ho, had breached the takeover code.

In August 2002, as part of a general offer, Chiang sold her stake in Pacific Challenge and resigned as chairwoman. The legal battle ended in August 2004, when Chiang and Kistefos settled out of court.

Meanwhile, the SFC continued to investigate Chiang and found she had violated the takeover code. The disciplinary panel was then chaired by former executive councillor Henry Fan Hung-ling - who was on the board of an Eco-Tek competitor called Dah Chong Hong.

A second SFC investigation cleared her in July 2007. But the ICAC picked up the case. The graft-busting agency had been headed by Fan's younger sister, Fanny Law Fan Chiu-fun, in 2006 and 2007 - a relationship of which Chiang made an issue at her trial.

The graft-buster first interviewed her in October 2007 and charged her in January 2008, just eight months after she was elected chairwoman of the Hong Kong General Chamber of Commerce.

This time she was accused of pocketing more than HK$3.7 million by instructing others to hold share options or shares of Pacific Challenge and Eco-Tek on her behalf. Pau and her former employee, Tahir Hussain Shah, were also charged.

It was also alleged that before the listing of Eco-Tek on December 5, 2001, Pau had asked Chiang's personal assistant, Yip Yuk-chun, to hold 8.84 million Eco-Tek shares in her name. Yip, who worked for Chiang for 15 years, testified against Chiang under immunity.

After the ICAC filed its charges, Chiang stepped down as the chamber's chairwoman and filed a series of judicial reviews and appeals, all the way to the Court of Final Appeal, to have her case heard in the High Court with a jury.

The trial finally started in the District Court without a jury in December last year.

It ended yesterday, when the District Court found that Chiang, Pau and Shah were guilty of fraud.

7

The number of children born to Chiang Chen, Lily Chiang Lai-lei's industrialist father, all of them daughters

 

Promotions