FORMER Far East Bank chairman Deacon Chiu Te-ken will not stand trial over allegations of conspiracy to defraud involving hundreds of millions of dollars, a High Court judge ruled yesterday. Mr Justice Leonard granted Chiu a permanent stay of proceedings. No reason was given when he unexpectedly gave his ruling, but it was generally believed the judge accepted Chiu is suffering from dementia and is medically unfit to conduct his defence. Chiu, who will be 68 next month, also contended that a delay of 101/2 years from the date of the alleged offences to the date of the trial made it impossible for him to have a fair hearing. The delay was also cited by his son, David Chiu Tat-cheong, 38, who asked for a permanent stay of proceedings on the grounds of abuse of process and on the Bill of Rights. David Chiu's application, however, was dismissed by the judge, who will hand down his reason at a later date. His trial is expected to start on May 5. Deacon Chiu was indicted on a total of 14 conspiracy charges. David Chiu was jointly charged on six counts. Deacon Chiu was absent when the ruling was delivered unexpectedly. An application for costs, which are expected to run into millions of dollars, will be heard later. While investigations commenced soon after a complaint was made to the Banking Commissioner in February 1985 regarding alleged irregular practices in the Far East Bank, Chiu was not arrested until October 31, 1988. He made his first court appearance before a magistrate 10 days later and it was followed by a number of long adjournments sought by the Crown, due to the complicated nature of the case and the mammoth number of documents involved. Deacon Chiu was accused of conspiracy to falsify Far East Bank documents purporting to show that credit facilities amounting to $246,678,566 had been granted by the bank to various companies. He was also charged with conspiracy to furnish false information to the bank to negotiate letters of credit and to defraud the Commissioner of Banking by making false representations concerning the beneficial ownership and control of companies to which the bank had made advances totalling $352.5 million. His counsel, Mr Anthony Scrivener, QC, leading Mr Philip Dykes, submitted that while the physical condition of his client after a successful kidney transplant last April was good, he was suffering from dementia. According to his doctors, he would not be able to remember events with any accuracy or give accurate instructions to his legal advisers and the condition was permanent, irreversible and progressive. Deacon Chiu had trouble communicating and his concentration was too poor to enable him to defend himself in a complex prosecution, it was submitted. Counsel for David Chiu, Mr Jonathan Caplan, QC, leading Mr Warwick Haldane, argued that the long delay had rendered a fair trial impossible. He accused the Independent Commission Against Corruption of deliberately delaying the investigation and said there was no arrest made until more than three years after a complaint was lodged with the Banking Commissioner. There were indications the criminal investigation had taken second place to financial considerations because, at the time, negotiations on the sale of the Far East Bank were in progress and the delay was to avoid adverse publicity before the deal was closed. The Crown, represented by senior assistant Crown counsel Mr Joseph Pethes and senior Crown counsel Ms Chiam Sou Hong accepted Deacon Chiu was suffering from intellectual impairment, but argued that the condition was not so serious that it made him unfit to defend himself. They said a permanent stay should only be granted in exceptional circumstances and there were no such circumstances in this case. Prior to giving his ruling, Mr Justice Leonard had asked for a copy of a Privy Council judgement delivered last month on a similar case. In that case, the Law Lords upheld Mr Justice Duffy's decision to permanently stay criminal proceedings against banker Charles Cheung Wai-bun who had faced a $157 million cheque fraud trial. In Cheung's case, dementia was also pleaded. Invited to make a further submission in the wake of this decision, Mr Caplan said the judgement indicated that one could not apply a rule of thumb in a case of this kind and say whether 10 years constituted delay and five years did not. The central issue was fairness and it must be decided on a case's own particular facts, he said. While no reason was given by Mr Justice Leonard, Deacon Chiu's solicitor, Mr John Mok, of Baker and McKenzie, was of the view that the judge must have found that the trial would have been unfair. This would have been due to the lengthy delay and Deacon Chiu's mental state, he said. The judge must also have taken into consideration Deacon Chiu's age and the public interest, in that no one had suffered any loss, Mr Mok said. A Legal Department spokesman said the Crown would wait for Mr Justice Leonard's written judgement before deciding whether to appeal against his ruling on Deacon Chiu. The legal course leading to yesterday's decision was set in motion on April 18, 1990, when Deacon Chiu and his son, who was arrested on February 2, 1989, both asked for a permanent stay of proceedings on the grounds of abuse of process. The application was heard by magistrate Mr Peter Line in September and October that year and Chiu's counsel, Mr Anthony Scrivener, QC, submitted that his client's ill health made him incapable of standing trial. He also told the court Chiu was suffering from a serious kidney problem from which had no chance of recovering and that his life expectancy was six months to two years. The application was refused. It was followed by a series of applications during which challenges including one to the appointment of Mr Line as a permanent magistrate and one relating to the jurisdiction of the Court of Appeal were made, taking the case through the High Court, the Court of Appeal and twice to the Privy Council. In the midst of all these, Chiu, a member of the Chinese National People's Congress who was described by his family as a workaholic, continued his vast business interests and also found time to form a political group - the Hongkong People's Action Association - which had seven members including his wife. He also visited various countries including the United States and Britain in search of a kidney for transplant. The search was a difficult one as it was believed Chiu was reluctant to receive a kidney which came from a non-Chinese. He eventually had a successful transplant in a mainland hospital in April last year.