HKSAR v. LIU KIT MAN

DCCC 817/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 817 OF 2014

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Reasons for Sentence

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1.  The defendant has been convicted after trial of a single offence of fraud, spanning between 4 August 2008 and 11 January 2012 by which contracts with a value of $1.7-odd million directed to Hong Kong Infix in which the defendant had a 30 per cent interest.

2.  At the time, the defendant was director and chief executive officer of the company and was therefore in a position of trust and authority in that company.  Full details of the offence can be seen in the earlier reasons for verdict.

3.  There are formal antecedents, but the defendant is a man of clear record.  He is in his 50’s, he is married with two daughters. I have described the defendant in my reasons for verdict as being able and intelligent, and obviously hard-working.  He is clearly respected in his industry.  There is evidence of charitable donations made by him.

4.  In mitigation it has been said that the figure of $1.7 million-odd contracts does not properly reflect the nature of the criminality.  After all, all the work done on the contracts was completed without complaint at the time.  And it is said that what is seen here as a failure to disclose the interest is not the same as the usual kind of fraud that the courts sentence.  The offence itself is not prevalent, so there is no need for a deterrent sentence.  And it is difficult in this case to quantify what was the actual loss or gain.  The face value of the contracts would overstate or exaggerate the criminality given that considerable resources and expenditure would have been made due to the performance of the contracts.

5.  Other factors the court must consider: that this case has evolved over a period of time, it is quite a lengthy fraud, and the defendant’s position of responsibility and trust in the company.  Given these factors, a sentence of imprisonment will have to be imposed.

6.  The appropriate guidelines are those that relate to breach of trust.  I do take the point that quantifying this in the range of 3 to 4 years would be excessive given the work that was done on the contracts. What the defendant had gained was through his partial interest in Hong Kong Infix was the opportunity to perform the contracts and take a benefit from that due to his role both in Kabu and Hong Kong Infix.

7.  I note that the first prosecution witness attempted to do his own quantification and said they would have asked for 30 per cent.  This of course would be optimistic and subject to negotiation.  The evidence for the profits of Hong Kong Infix show that at the time it was loss-making.

8.  Taking all these factors into account I consider the operative range of sentence should be within the range of 2 to 3 years’ imprisonment.  Having regard to the defendant’s excellent personal characteristics, I will sentence at the bottom of that range.

9.  The sentence on Charge 1, the charge on which I convicted the defendant, would be one of 2 years’ imprisonment.