Cheung also earned praise from current Chief Executive Carrie Lam Cheng Yuet-ngor, who once described him as “not even one of the best, but the best non-official public servant”.

But Cheung stayed less than a year in Leung’s de facto cabinet before resigning from all public posts – the most prominent one being chairman of the Urban Renewal Authority – following two decades of public service when HKMEx was being investigated in May 2013.

Cheung has denied one count of conspiracy to defraud – jointly charged with the trading platform’s former chief financial officer, Jacky Choi Tat-ying, 51, who has pleaded guilty – and another count of fraud.

But District Judge Amanda Woodcock on Friday found there was overwhelming evidence against Cheung and convicted him on both charges.

Conspiracy to defraud carries a maximum sentence of 14 years in prison, but that jail term is capped at seven years at the District Court.

Prosecutors had accused Cheung and Choi of conspiring, between May 2012 and May 2013, to hide the HKMEx’s true financial position and mislead the Securities and Futures Commission (SFC) into letting it keep its authorisation to provide automated trading services in Hong Kong.

Judge in fraud trial involving former adviser to CY Leung recuses himself, delaying proceedings for sixth time

Cheung was further accused of cheating a company called Sinomax Finance out of HK$30 million in April 2013 for the benefit of New Effort Holdings, a British Virgin Islands-based firm wholly owned by Cheung, who was the majority shareholder in the exchange.

The District Court heard the SFC granted the HKMEx authorisation to trade in April 2011, on the condition it would have sufficient resources and provide regular reports on its financial situation.

But the HKMEx had difficulty complying with the financial conditions almost from the beginning, causing the commission to express concern as early as September 2011.

At trial, Choi testified against Cheung, saying his boss had given him instructions to work on the weekly financial reports and keep the SFC in the dark for as long as it took to find more capital to keep the platform afloat.

Choi’s methods included using bad cheques, and providing false, misleading or favourable snapshots of the HKMEx’s financial position.

But Cheung claimed he only knew about the fraudulent acts after he was charged, saying he had not been involved in providing false information to the SFC as he had spent most of his time either performing public duties or trying to borrow money to finance the HKMEx.

His defence counsel, Eric Kwok Tung-ming SC, also attacked Choi’s credibility, calling his evidence a fabrication to secure a sentencing discount for cooperating with prosecutors.

But the judge found Choi “a credible witness who followed instructions from his employer” and rejected Cheung’s account, which she believed was “tailor-made to exonerate himself”.

“He had given general instructions to Jacky Choi to do what he needed to do to present an acceptable cash balance to the SFC,” Woodcock wrote in her 131-page judgment. “As a result, Jacky Choi did what he could do to deliberately conceal, when it was necessary, the true financial position of the Exchange from the SFC.”

In mitigation, Kwok observed that the case was unusual in that nobody had suffered a loss or even risked one as a result of his client’s conspiracy, which he believed was fuelled by a stubbornness in believing the mercantile market would be good for Hong Kong.

“The defendant himself got nothing out of keeping the exchange alive,” the counsel said. “What he earned himself was a bankruptcy order.”

His submissions were backed by letters from 11 people Cheung met in public service, including Exco member Fanny Law Chiu-fun, another member of Leung’s campaign.

Law recalled that Lam had praised Cheung’s public service while she was Secretary for Development, and said former Chief Executive Donald Tsang Yam-kuen and his financial secretary, John Tsang Chun-wah, had supported his idea of having a commodities market in the city.

Lawmaker Abraham Shek, Cheung’s former colleague at the Land Development Corporation, the Urban Renewal Authority’s forerunner, wrote that Cheung had made admirable efforts in improving the living conditions of the city’s underprivileged, and for Hong Kong’s overall interest.

Meanwhile, Choi’s counsel, Graham Harris SC, argued for a suspended sentence in recognition of his client’s early plea and assistance to the prosecution in a case that has dragged on for years.

Both defendants, neither of whom have a previous record, are remanded in custody until their July 23 sentencing hearing.