A former chairman of CY Foundation Group was found guilty yesterday of defrauding the listed company in a HK$53 million property transaction. Theodore Cheng Chee-tock, 63, nephew of former National People's Congress vice-chairman Cheng Siwei, was convicted by the District Court of one count of conspiracy to defraud. Mr Justice Stanley Chan Kwong-chi said Cheng had deceived the company's board of directors and shareholders by concealing his ownership of a Wan Chai property and getting the company to buy it for HK$53.5 million in 2007. The court heard that Cheng, through a listed company in Australia, of which he was the chairman, bought the property at 17/F, 200 Gloucester Road, for HK$42.2 million in 2006. Concealing his interest in the property was in violation of the listing rules, the court heard. The high-profile Cheng has been trading hi-tech products for about 25 years and is also into lottery and gaming businesses. Judge Chan also found co-defendant Philip Yu, 42, guilty of a joint count of conspiracy to defraud and two counts of money laundering involving HK$12 million. Sentencing was adjourned to October 30, pending background reports. Cheng and Yu were released on bail of HK$2 million and HK$1 million respectively on the condition they not leave Hong Kong. Another co-accused, Chong Ching-lai, who used to be CY Foundation's chief financial officer, was cleared of four counts of money laundering after the judge ruled it could not be proved beyond reasonable doubt that Chong was aware of the scheme. The three were arrested by the Independent Commission Against Corruption. Cheng and Yu devised a layering scheme to sell Cheng's property to different companies before finally inducing CY foundation to buy it. In October 2007, CY Foundation said it had agreed to buy it for HK$53.5 million, saying the seller and its ultimate beneficial owners were independent third parties. Cheng and Yu told CY Foundation the acquisition did not constitute a connected transaction as per stock exchange rules.