A director of a forex company has admitted obtaining a trading licence by submitting false bank account information to the Securities and Futures Commission, claiming it had sufficient funds to be eligible for a trading licence. Cheng Chi-sin, 44, pleaded guilty to one charge of aiding and abetting making false representations to obtain a licence, two of making false representations to obtain a licence and five of failure to maintain the financial resources requirement (FRR). Another company director, Lam Shu-man, 35, denied similar charges, and his trial was adjourned until today before Deputy District Court Judge Stephen Geiser. Prosecutor Gramsci DiFazio said the two defendants, directors of Canwell Forex International, applied for a leveraged foreign exchange trader licence in 1994. The pair submitted documents, including FRR documents, showing the company's paid-up, liquid assets and its ranking liabilities, as required by the SFC. The two defendants were accused of claiming in eight FRR documents that the company had between $28 million and $32 million in the bank. The legal requirement is $25 million. The FRR documents were signed either by both men or by Cheng alone, and were submitted to the SFC, the court was told. The prosecution said Canwell had borrowed most of the cash from a loan company called Silver Bound Capital before submitting the FRR forms to the SFC. In the FRR documents, Canwell did not disclose the loans, nor did it inform the SFC that the company had capital of less than $25 million, Mr DiFazio said. On June 8 1995, the SFC issued a trader's licence to Canwell based on the submitted FRR reports. The matter came to light after the SFC reported the matter to the Commercial Crime Bureau in November 1995. Cheng and Lam were arrested in March 1996 and admitted to the police that some of the FRR reports had been signed by them.