Alcohol 'impaired director's judgment'
A toxicology expert believed alcohol impaired the judgment of the former head of the Civil Aviation Department, who is accused of insider trading, when he had made the transaction, a court heard yesterday.
The comments made by Dr Lau Fei-lung, director of the Hong Kong Poison Information Centre, were read out in Eastern Court, where Albert Lam Kwong-yu, 66, a former director general of the department, is facing trial.
Lam has pleaded not guilty to one count of insider trading. He is accused of abusing price-sensitive information he obtained as a non-executive director of Hong Kong Aircraft Engineering Company (Haeco) to acquire 4,000 Haeco shares one trading day before Swire Pacific acquired 15 per cent of the company's stock from Cathay Pacific on June 7, 2010.
Trading in Haeco shares was suspended on June 7 when the acquisition occurred. The same day, Swire announced a general offer to buy Haeco shares from existing shareholders. When trading resumed, shares closed at HK$104, 24 per cent higher than on the last trading day before the announcement.
The Securities and Futures Commission is prosecuting Lam for making a profit of HK$79,436. Lam has resigned from Haeco.
Lam has said he was under the influence of alcohol when he bought the shares.
He said he had consumed four glasses of wine and a gin and tonic at a luncheon at the Hong Kong Club and taken a nap before receiving a call telling him of a board meeting that day regarding Swire's intended acquisition of Haeco's shares from Cathay.
Lau wrote in his report that he believed Lam had been intoxicated and might not have registered properly that he had been told of the intended acquisition of Haeco shares.
The doctor said he believed Lam had been 'under the influence of alcohol so much that his judgment was impaired'.
Lam's lawyer, Lawrence Lok Ying-kam, quoted Lau as saying Lam made the purchase without remembering his role as a non-executive director of Haeco or that he had been told about the intended acquisition.
The court heard Lau had written the report after receiving letters from Lam's lawyers and based on information he had been given.
Also yesterday, Richard Witts, a former chief executive of the Hong Kong stock exchange, testified for the defence that he would often see Lam at luncheons organised at the Hong Kong Club and that he had sat at a table with him on June 4, 2010. Witts said the wine servings at the luncheons would be considered generous and that waiters would regularly top up the guests' glasses.
The trial continues before Deputy Magistrate John Glass, when prosecutor Allen Lam Ming-yiu and Lok are expected to make their final submissions.