3 jailed for up to 6 years, 8 months over manipulating shares of Ching Lee Holdings in Hong Kong
Hong Kong Free Press
A Hong Kong court has sentenced three people to up to six years and eight months in jail for manipulating shares of Ching Lee Holdings after a landmark trial.
The High Court on Monday jailed Sit Yi-ki and Tam Cheuk-hang for six years eight months for conspiring to carry out false trading under the city’s Securities and Futures Ordinance, while Lam Wing-ki was sentenced to four years and four months in prison.
A nine-member jury in May found the trio guilty after a 22-day trial, marking the first time the offence had been tried in the High Court following an investigation by the Securities and Futures Commission (SFC).
Christopher Wilson, an executive director of enforcement at the SFC, said the market watchdog welcomed the court judgement.
It would be an “important milestone” for the SFC to combat market manipulation and sent a strong message of deterrence regarding the legal consequences of market misconduct, Wilson told reporters after the sentencing, according to local media reports.
Deputy Judge of the Court of First Instance of the High Court Douglas Yau said the case involved sophisticated planning and cross-border criminal activities, causing damage to investors and the reputation of Hong Kong as a global financial centre.
While the sentence should carry a deterrent effect, Yau said the three defendants were not the masterminds of the conspiracy and did not warrant the offence’s maximum 10-year imprisonment.
The SFC investigation revealed that the trio had conspired with Ho Ming-hin and Simon Suen – identified as the masterminds of the scheme – as well as others, to manipulate the shares of Ching Lee between March 2016 and September 2016. Ho and Suen have arrest warrants against them after leaving Hong Kong.
Yau set a seven-year starting jail term for Sit and Tam, while Lam had a five-year starting point for her lesser role in the scheme.
The court heard during mitigation that the case was prosecuted in 2020 but the trial only began in April, causing tremendous stress to the defendants.
Yau took four months from each of the defendants’ sentences and gave Lam an additional four-month reduction because of her son’s special needs.
Ching Lee, an investment company founded in 1998 that specialises in the construction industry, was listed on the Hong Kong Stock Exchange in March 2016.
Ching Lee’s share price was inflated by as much as 20 times its initial public offering to reach a peak at HK$5.98 in July that year, before collapsing to HK$0.45 on September 7.
SFC said the manipulation was conducted through 156 securities accounts under the defendants’ control, which resulted in a false or misleading appearance of active trading and an artificial increase in trading volume for Ching Lee shares.
The scheme had ensnared illicit profits of over HK$124 million, the watchdog said.
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