Lee Ming Tee saga ends with a year's jail for tycoon

The long-running legal saga involving Lee Ming Tee ended yesterday when the Malaysian tycoon was jailed for a year over his role in a deception to inflate the true value of the Allied Group.

Mr Justice Michael Burrell described the case as 'an extraordinary piece of criminal litigation' and refused to impose a suspended sentence.

Sitting in the Court of First Instance, he noted the serious nature of the offences, which had affected Hong Kong's reputation.

He said Lee, as the then-chairman, bore heavy responsibility for allowing his subordinates to publish false accounts to deceive the company's creditors.

Lee, 64, appeared shocked by the sentence but remained calm in the dock. He was also disqualified from being a director of any company for four years.

He had pleaded guilty to two charges of publishing a false statement or account under the Theft Ordinance. He deceived members or creditors of the Allied Group by publishing misleading consolidated accounts in 1990 and 1991 annual reports.

But Lee denied two similar charges and another two counts of conspiracy to defraud involving a $680 million payment on the issuing of new shares between 1990 and 1992.

It was alleged Lee conspired with Ronald Tse Chu-fai, the former finance director and financial controller of Allied Group, and others to defraud the group's shareholders and creditors, the Securities and Futures Commission (SFC) and the Hong Kong stock exchange.

These charges have been dropped against both men.

Tse received a suspended sentence of two years in December last year after admitting one count of publishing a false statement or account.

In defending the decision to drop the fraud prosecution against Lee, Director of Public Prosecutions Grenville Cross SC said yesterday that what Lee had admitted adequately reflected his criminality. 'There was no longer any public interest to be served in pursuing this prosecution,' Mr Cross said.

In sentencing, Mr Justice Burrell said the offences were very serious in a financial centre such as Hong Kong. They had not only affected public confidence in the market but international confidence in Hong Kong's reputation.

The judge accepted that Tse and others had been 'more hands-on' in orchestrating the deception but said Lee, as the then chairman, had agreed and permitted it to happen.

He also took into account the powerful mitigation, including Lee's guilty plea, his previously blameless life and the fact there was no loss to the company. He also noted Lee had agreed to pay $15 million towards the prosecution's costs and had also resigned as a director in September 1993 to protect the Allied Group.

He had earlier paid $8.5 million towards the prosecution's costs and $2.52 million to the SFC as costs in relation to earlier court proceedings.

The investigation into the Allied Group began in August 1992 but Lee was only charged on August 25, 1998.

He twice succeeded in having the proceedings halted but the decisions were overturned by the Court of Final Appeal.

The chairman of the Allied Group, Sir Gordon MacWhinnie, said last night Lee's plea would have no impact on the company, which was financially sound and had established the best practices of corporate governance.