Three men charged in connection with HKMEx inquiry
Fourth man still being questioned as financiers doubt rescue bid for failed commodities agency
Three men were charged last night in connection with the probe into the failed Hong Kong Mercantile Exchange (HKMEx) founded by executive councillor Barry Cheung Chun-yuen.
A 55-year-old man surnamed Dai, a 50-year-old surnamed Li and another 50-year-old surnamed Lian were charged with possession of false documents.
They will appear in Kowloon City Court today. Another man, 60, is still being questioned.
The news came as financiers and a key shareholder of the HKMEx said they were reluctant to be part of a US$100 million capital-raising effort planned by Cheung. Many said they needed more time to judge the viability of the exchange's business model.
Cheung has become embroiled in an escalating political and financial controversy after the Securities and Futures Commission (SFC) launched an investigation into the HKMEx.
The SFC referred the case to police after finding irregularities. Cheung was forced to return the exchange's trading licence and took immediate leave of absence from all public positions.
While he insisted he would not fold the company or resign from his official posts, his political career and the future of the HKMEx is increasingly in doubt.
It is estimated the exchange will need several million dollars a month to keep running. Former lawmaker Chim Pui-chung, who claimed to have lent HK$8 million to Cheung two years ago, yesterday estimated Cheung - whose New Effort Holdings owns 56 per cent of the exchange - may have lost HK$500 million.
It means the estimated losses of the HKMEx could run to more than HK$1 billion.
Cheung declined to make any comment yesterday. A source close to the embattled executive councillor said yesterday the investigation had been blown out of proportion by the media for "political reasons". The source said most comments on the case had been "largely inaccurate". The source, who said Cheung would clarify the issues at an appropriate time, added: "The whole thing would be completely different if it was not related to Barry Cheung."
A spokeswoman for the HKMEx refused to comment.
However, more political figures yesterday joined calls for a deadline to be set on Cheung's leave of absence.
One fellow Exco member, who refused to be named, said: "If he does not see how [the incident] can be settled in the next three to six months, he should consider resigning from the Exco and other public duties."
Meanwhile, a government source said yesterday Financial Secretary John Tsang Chun-wah "felt sorry about the suspension of HKMEx".
The source said Tsang had been aware of the financial difficulties faced by HKMEx for at least a year but did not know a police investigation was likely until it was announced.