Sister of Chu brothers jailed over Tungda fraud
A sister of Tungda Innovative Lighting's former executive directors whose bank account was used to help inflate revenue ahead of the company's listing was jailed for one year yesterday for money laundering.
Chu Pik-ang, a former accounting department staff member at the company, earlier pleaded guilty in the District Court to one count of dealing with property known or believed to represent the proceeds of an indictable offence.
"Though she had no knowledge of the scheme, she turned a blind eye to the use of her bank account," Judge David Dufton said.
Chu is the younger sister of Chu Chien-tung and Chu Chick-kei, previously executive directors at Tungda, which has been suspended from trading since 2004. Chu Chien-tung and Chu Chick-kei were earlier sentenced to 12 and 10-1/2 years' jail, respectively, in separate proceedings.
Tungda listed on the stock exchange's Growth Enterprise Market in 2002 and then sought a listing on the main board.
The court heard earlier that between 2002 and 2004, the company claimed that a significant amount of its business derived from the sale of induction lamps.
Tungda and its subsidiaries received money disguised as payments from overseas customers from Chu Pik-ang's account. These funds were transferred back to her account so the procedure could be repeated. In total, Chu's account received HK$68.5 million.
In one typical example, prosecutor Edwin Choy earlier said, cash was withdrawn from Chu Pik-ang's account and at the same time the same amount was deposited into an account of Tungda Electrical, a related company. Then two cheques with sums roughly equivalent to the first amount were drawn from Tungda Electrical's account and deposited into Chu's account. The deposit made to Tungda Electrical was used as evidence of payments to Tungda to purchase induction lamps, but the sales never took place.
"These fictitious sales were used to inflate the turnover of Tungda Innovative," Choy said.
The judge noted that Chu Pik-ang had not benefited from her crime. Her brothers absconded during their trial last year. Chu Chick-kei returned in February, but Chu Chien-tung is still missing.