Hong Kong business costs lower, Slovak in money laundering case tells court

PUBLISHED : Friday, 06 June, 2014, 4:06am
UPDATED : Friday, 06 June, 2014, 4:43am

A Slovakian businessman at the centre of an international money-laundering case wanted to establish companies in Hong Kong because of the city's tax regime and proximity to the Chinese market, a court heard yesterday.

Defendant Juraj Jariabka, 36, said he had several reasons for wanting to base two potential companies in the city, but the lack of value-added tax (VAT) was a key consideration.

Last week, the District Court heard the Slovakian hired an undercover Italian journalist, Antonio Papaleo, in May to visit Hong Kong to set up two front companies and a bank account, which the prosecution argued were to receive the proceeds of crime.

Defence counsel Philip Ross disputed suggestions that Papaleo had been employed to launder dirty money. Jariabka denies one count of incitement to deal with property known or believed to represent proceeds of an indictable offence.

On the stand yesterday, he described the lighting and publishing businesses he had intended to set up with Austrian friend Jozef Drlieka.

The two companies could benefit from cheaper supplies in the region, Jariabka said. In Europe, VAT could add to the cost of services and products, so the absence of such a tax in Hong Kong would also lower costs, he said.

Papaleo was hired to establish the operations only because Drlieka had a freshly issued passport that might have posed problems in the process, Jariabka said.

The case continues today before Judge David Dufton.