Yeung made a killing on penny stocks, says witness
The accused was a big trader with daily deals in the millions, says ex-director of securities firm
Birmingham City Football Club owner Carson Yeung Ka-shing, on trial for money-laundering, made HK$100 million from speculating on penny stocks from 2000 to 2002, a former senior member of a securities firm said yesterday.
"Over the years, Mr Yeung made big money speculating on small value stocks," Lippo Securities' former associate director Jackie Pan Chik told the District Court.
Prosecutors say that tens of millions of dollars that passed through five bank accounts connected to Yeung from January 2001 to December 2007 were not commensurate with his income.
Pan is the first defence witness for the 52-year-old businessman who is on trial for knowingly dealing in ill-gotten gains involving HK$721 million from January 2001 to December 2007.
The court heard that the penny stocks that Yeung invested in were Cedar Base Electronic (Group), Hycomm Wireless, Greater China Sci-Tech, China United Holdings and Can Do Holdings.
Pan said there was intense market speculation over securities in companies linked to the mainland in the early 2000s and Yeung was a big trader, with daily deals in the millions of dollars.
He had the largest trading volume of all Pan's clients, Pan said.
It was "very common" for speculative traders to hold more than one securities account. Yeung was using multiple accounts with various securities firms between 2001 and 2007.
Pan, who left Lippo Securities in 2007, said he never suspected the provenance of the money that Yeung deposited.
"Mr Yeung deposited with a purpose," Pan said. "He didn't withdraw money in a short period of time. If he withdrew money in a short time, our compliance officers would have focused on his account."
He said no cash was put into his Lippo Securities accounts without an apparent reason.
In the prosecution's opening statement, John Reading SC told the court that the money deposited in Yeung's five bank accounts did not correspond with Yeung and his father's combined annual income of HK$2,159,392.
"The pattern of deposits and withdrawals in the subject bank accounts show placement, layering and integration," he said.
Relatively unknown before his emergence on English football scene, Yeung took control of Birmingham City FC in 2008 in a HK$237 million takeover from David Sullivan and David Gold, now co-owners of West Ham.
The trial continues today.
