A chairman of a listed company and a former bank executive have been arrested in connection with a $90 million credit and bribes scam.
Chan Chun-hung, 42, chairman of toy-making company Hung Fung Group Holdings, allegedly offered advantages to a former assistant general manager of Dao Heng Bank for granting credit facilities to the group's subsidiary company, Hung Cheong Toys International. Chan is a director of the subsidiary company.
The former bank manager, 33, who has not been identified, allegedly accepted free trips to the mainland and to Macau before he quit early this year. In return, he allegedly granted about 36 letter of credit applications based on bogus business transactions with four different shell companies, the Independent Commission Against Corruption (ICAC) said.
A source alleged Hung Cheong Toys International bought plastic and packaging materials with the four shell companies in the bogus business transaction. 'As a result, credit facilities totalling $90 million were granted to those four shell companies between April and December last year,' the ICAC said.
The ICAC said two sisters, owners of the four shell companies, were Chan's associates, adding: 'Mr Chan had allegedly instructed the sisters to withdraw money from the accounts of the four shell companies on several occasions after Dao Heng Bank remitted the loans.'
Chan has been bailed. The former bank manager and one of the sisters, 34, were arrested on Wednesday. The ICAC said no charges had been laid and the investigation was continuing.