Blackmail was not the reason the former chairman of a listed company transferred 100 million shares in 2009; rather it was part of his own plot to inflate the value of his company's stocks, the High Court heard yesterday.
That was the suggestion defence lawyers put to prosecution witness Hui Chi-ming, who used to head the Hong Kong-listed Sino Union Petroleum and Chemical International.
Hui had earlier testified that gangsters had frightened him into handing over 100 million of the company's shares in March 2009. He said that he was told one of the alleged blackmailers was one of Cheung Tze-keung's henchman - a name, he said, that filled him with terror as Cheung had a reputation for kidnapping and torturing wealthy people.
Koon Wing-yee, 56, former chairman of Easyknit Group, Wong Chin-yik, 61, Shum Man-keung, 59, Ng Chi-keung, 71, and Chan Kwai-nam, 62, are jointly charged with two counts of conspiracy to blackmail and one of theft. Wong also faces a charge of blackmail and one of possessing arms at the time of committing blackmail.
Hui contended that Koon had demanded the shares from him and had said Wong was a "follower" of Cheung and a leader of a "big circle gang".
To meet Koon's demand, Hui said, he bought 100 million shares from a friend, Zhou Aiguo, at HK$1.35 per share. Zhou had then transferred the shares directly to Chan.
Yesterday, Gary Plowman SC, for Koon, suggested that Hui was the one who prepared the transfer agreement signed by Zhou and Chan.
Under the agreement, the 100 million shares were sold for HK$1.35 per share but could not be resold within three months, otherwise the shares would be treated as Zhou's property and Koon would have to pay compensation for any financial loss, the court heard.
Plowman said the HK$1.35 price was 70 to 90 per cent higher than the prevailing market rate. "I suggest the price of HK$1.35 is set to tell others your company shares are worth more than the current trading price," he said.
The barrister also suggested that the "inflated" transaction price disadvantaged Koon because it required him and Chan to pay higher stamp duties.
He also claimed Hui gave Koon the shares because of unspecified incidents that happened in 2007 and 2008.
Hui disagreed, saying the agreement was a "tool" used by Koon to blackmail him.
He also rejected the idea that the price he paid for Zhou's shares was inflated, arguing it would have been very difficult to buy such a large volume from the stock market in so short a time.
The price was "completely reasonable", Hui said, as he might not have been able to buy the stocks on the open market even if he offered HK$3 per share.
Hui is a former committee member of the Chinese People's Political Consultative Conference and an honorary consul of Madagascar.
Before the alleged blackmail, the court heard, Hui had sold 250 million shares to Zhou at HK$1.20 per share, when the prevailing market rate was 76 HK cents.
Plowman suggested that price had also been "artificially inflated". The trial continues on Monday.