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Local businessman and racing personality Keith Hsu Kai-foo has denied being cheated of more than US$1 million by brokers allegedly involved in a US$75 million investment fraud, sex, drugs and gambling scandal in the United States.

 Mr Hsu is a director of Hong Kong electronics firm Daiward and British-based Firman & Sons.

 Firman & Sons, established 320 years ago, manufactures uniform regalia for the Queen's Royal Guard and Cavalry, by appointment to the Royal family.

 Mr Hsu was named as one of 8,000 clients cheated by 13 brokers from the now-defunct A R Baron & Co, who appeared in Manhattan Supreme Court last Wednesday charged with 174 counts of misrepresentation, market manipulation and unauthorised trades.

 District Attorney Robert Morgenthau said the investment firm was set up by the 13 brokers with the sole intention of defrauding clients.

 Two of the brokers allegedly spent up to US$25,000 a night of clients' money in strip clubs and on drugs and gambling.

 Mr Hsu said contrary to reports he had lost more than US$1 million, he was cheated of US$200,000 in two unauthorised trades two years ago, when he transferred a tranche of shares to A R Baron & Co, which were then sold without his knowledge.

 'I was first introduced to [A R Baron & Co] through some friends in England, where I was living at the time,' Mr Hsu said.

 'Later, the company contacted me in England and I transferred a number of shares to them in New York.

 'The money was lost over two transactions, when the shares were sold without my authority.

 'After that, I realised what sort of company I was dealing with and had nothing further to do with them.

 'I lost about $200,000 - not the $1 million that has been reported.'  He said he had not been contacted by US authorities, so was not sure if he would be required to testify in the fraud trial in New York.

 Mr Hsu is well-known in Hong Kong racing circles, being the owner of Face The Odds and Sir Lancelot - a colt bought for $600,000.



Hsu denies US$1m loss as victim of scandal