Allen Lee unaware of alleged fraud

A LEGISLATOR who was a director of a company at the centre of an alleged $127.6 million swindle yesterday strongly denied he knew anything about misuse of company funds.

In a court statement, Liberal Party leader Allen Lee Peng-fei, 53, said he was persuaded to join the board of Intercontinental Housing Development Ltd (IHD) by fellow Legislative Council member, IHD chairman Ngai Shiu-kit.

The company's chief executive, Ch'ng Poh, is on trial for fraud at the High Court.

Malaysian businessman Ch'ng, 53, allegedly planned the fraud with disgraced former director of the Ka Wah Bank Low Chang-hian, 49, the court heard.

Ch'ng is accused of using the money belonging to IHD to buy a controlling interest of 77 million shares in the publicly listed company in August 1985. Three years later, he wrote off the entire $127.6 million sum, it was claimed.

Mr Ngai and Ch'ng bought IHD through their company Join Park Ltd for $232,514,000 from the then owners Low and Victor Tan Khai-chong.

Following the purchase, Mr Ngai, 69, introduced Mr Lee to the company as a director.

But in the statement read out in court yesterday, Mr Lee said he was never aware of the missing $127.6 million.

He said he was invited onto the board because IHD was hoping to expand its technology projects into China.

''I took no part in the management in the company and received no remuneration. I did not attend any board meetings,'' Mr Lee said. ''In December 1985 Mr Ngai said he was going to step down and suggested I did likewise. No one told me that $127 million odd was missing.'' The jury heard the illegal transaction was concealed by circulating three cashier's orders and 16 cheques through various accounts in the Ka Wah Bank on August 17, 1985.

Ch'ng denies conspiring with Low, Tan and others to defraud IHD and publishing a false report to IHD shareholders in December 1985.

The trial continues.