THE director of a shipping company obtained a licence from the Marine Department for a barge which did not exist and later sold the imaginary barge to another man, the District Court heard yesterday. Law Yui-wo, 39, pleaded guilty to two counts of obtaining a pecuniary advantage by deception and one count of obtaining property by deception, and was jailed for 31/2 years. Defence counsel Nigel de Boinville said Law left his business in the hands of his uncle and emigrated with his wife and two children to the United States in 1989. The offences came to light when Law's uncle stopped repaying instalments to a bank in September 1989, the court heard. Law was extradited to Hong Kong in November last year. Deputy Judge Muttrie said Law's company owned a barge and registered it as KH 86-6. At the same time, Law said he owned another barge called KH 87-1 although he knew that it did not exist. In 1987, Law used the non-existent barge as collateral to secure loans and an overdraft facility with two banks. He sold the imaginary barge to Leung Ping-kwan at $2.78 million two years later. Mr Leung actually received the barge KH 86-6, which belonged to the bank. On March 5, 1990, a government chemist examined the barge seized from Mr Leung and found ''KH 86-6'' written in red under white paint on the wheel house. The barge was returned to the bank after a case in the High Court in 1990. In sentencing, Deputy Judge Muttrie described the execution of the fraud in this case as ''complex and well-planned''. Mr de Boinville said if Law had continued to operate the company in the territory, nobody would have suffered any loss.