HKSAR v. CHEUNG CHEUK MAN

CACC 67/2025 [2026] HKCA 349

On appeal from [2024] HKCFI 1789

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO 67 OF 2025

(ON APPEAL FROM HCCC NO 375 OF 2023)

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BETWEEN

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J U D G M E N T

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1.  The applicant pleaded guilty to one count of fraud and was sentenced by Toh J (the judge) to a term of 40 months’ imprisonment on 20 June 2024.

2.  On 3 April 2025, the applicant filed an application for leave to appeal against sentence out of time by over eight months. In an accompanying affirmation dated 2 April 2025, he alleged that the sentence is excessive and explained that the delay in filing was due to his suffering from depression, as a result of which he was unable to concentrate and had been receiving ongoing psychiatric medication.

3.  Ms Cherry Chong, for the respondent, opposes the grant of an extension of time, submitting that the applicant has failed to provide a reasonable or proper explanation for the delay in filing, or any justifiable grounds of appeal in support of his leave application.

4.  The Court is less disposed to grant leave to appeal out of time in the absence of cogent and compelling reasons for the delay in filing a notice of appeal[1]. In considering such applications, the Court will have regard to the length of the delay, whether the applicant has a reasonable explanation for it, and whether sufficient grounds of appeal are shown, and may examine those grounds to ensure that, by refusing leave, it is not shutting out any substantial and plainly arguable ground of appeal: HKSAR v Yim Shek Wo[2].

5.  The applicant applied for legal aid for his appeal, but later withdrew the application. He appears in person at the hearing of his leave application.

The summary of facts

6.  The count of fraud alleged that the applicant, between 1 January 2016 and 7 July 2017, by deceit, namely by concealing from or failing to disclose to PCCW Services Limited his and/or his family member’s interests in Go Go Wifi Limited (GGWL), and with intent to defraud, induced PCCW Services Limited to include and maintain GGWL in the list of approved suppliers for the provision of goods and services; and to place purchase orders with GGWL, which resulted in benefit to GGWL or prejudice or substantial risk of prejudice to PCCW Services Limited and/or its subsidiaries.[3]

7.  The facts outlined to the judge and admitted by the applicant were as follows.[4] On 8 May 2014, at the applicant’s request, his mother-in-law incorporated GGWL. Between 8 and 14 July 2014, the applicant briefly served as its sole director. Since 14 July 2014, his mother, Madam Lee (Lee), had replaced him as GGWL’s sole director, and since 5 August 2014 she has also been its sole shareholder. On 12 August 2014, Lee opened a bank account for GGWL with the Bank of East Asia Limited (GGWL’s account), for which she was the sole authorised signatory.

8.  On 24 October 2014, the applicant signed an employment contract with PCCW Services Limited, a subsidiary of the PCCW Group. On 24 November 2014, he was deployed as a manager of the Network Service Team of PCCW Solutions Limited (PSL), another subsidiary of the PCCW Group providing information technology and network solutions to its clients. He was responsible for monitoring the team’s daily operations and providing network support advice to PSL’s other departments and teams. At the time of his employment, he was provided with PSL’s “Corporate Responsibility Policy”, effective from February 2014, which stipulated that he must not do anything which conflicts, or could be construed as possibly being in conflict, with the interests of the PCCW Group; he must not have personal business dealings which detract from or conflict with those interests; and he must complete a declaration form where a potential conflict of interest arises.

9.  On 5 January 2016, GGWL submitted a Vendor Registration Form (the form) purportedly signed by its assistant manager, called Mandy Ng (Ng), to the Group Strategic Purchasing Department (GSP) of PCCW-HKT Limited, an associate company of the PCCW Group. The contact number given on the form for GGWL was registered under Lee’s name, and the business address was that of premises occupied by Lee’s friend, rather than by GGWL. GGWL also declared on the form that no members of the PCCW Group had any interest in it.

10.  In early January 2016, the applicant recommended to his then supervisor and Senior Vice President of PSL, Mr Mak (Mak), that GGWL be engaged to provide licences and support services for hardware that PSL had purchased from A10 Networks Inc (A10) for a project. In response to Mak’s enquiries, the applicant claimed that: (i) GGWL was an authorised distributor of A10; (ii) GGWL was the only company that had passed the technical evaluation for the project; and (iii) he had no conflict of interest in GGWL’s engagement. Relying on these representations, Mak agreed to engage GGWL as a supplier. On 22 January 2016, GGWL was approved for inclusion on the list of approved vendors of the PCCW Group and its subsidiaries.

11.  Between January 2016 and March 2017, PSL awarded 29 purchase orders (POs) to GGWL with a total value of HK$30,390,153. As at 7 July 2017, PSL had paid into GGWL’s account a total of HK$8,678,191.95 and US$988,066.64 in respect of these POs. At all material times, the applicant was responsible for obtaining quotations, requesting GSP to issue the POs, and confirming receipt of such goods and services from GGWL before payments were released to GGWL.

12.  In the procurement process for five POs issued between 13 May 2016 and 24 February 2017, which involved amounts of HK$780,000 or more, Ng of GGWL falsely represented that no employee of PCCW or their direct family members had any financial interest in GGWL. In four of those five POs, the applicant confirmed in writing that he had no conflict of interest in the purchases[5]. Further, Mr Ho (Ho), a sales director at A10, assisted the applicant on several occasions by obtaining dummy quotations from other companies so that GGWL appeared to be the lowest bidder among other quotations submitted to PSL and would be awarded the contracts.

13.  In April 2017, PSL conducted internal investigations. It was discovered that GGWL had not provided any services under the 29 awarded POs, and that the services specified were unnecessary, being either covered by PSL’s other hardware suppliers or carried out with the use of its internal resources or manpower. Forensic examination of the applicant’s company email account and personal folder on PSL’s server revealed that quotations purportedly submitted by GGWL in relation to six of the awarded POs were likely prepared by the applicant himself. It was concluded that, had PSL been informed of the applicant’s interest in GGWL, GGWL would not have been placed on the list of approved vendors or awarded any POs.

14.  On 7 July 2017, the applicant and Ho attended a meeting with the applicant’s then immediate supervisor, Mr Chiu (Chiu). During that meeting, Ho informed Chiu that GGWL was one of three suppliers of specific software service support to A10, when in fact GGWL was not an authorised distributor of A10.

15.  On 18 September 2017, the applicant was arrested, and an ATM card of GGWL’s account was found in his possession. Subsequent enquiries with the bank revealed that: (i) between May 2016 and August 2017, GGWL’s account received from PSL a total of HK$8,678,191.95 and US$987,646.64; (ii) substantial sums were transferred from GGWL’s account to the personal bank accounts of the applicant, his wife and Lee, or withdrawn in cash; and (iii) GGWL’s account did not receive any substantial cash deposits other than from PSL; and (iv) no payments were made from GGWL’s account to any companies providing IT services.

16.  In June 2018, the applicant, his wife and mother, and GGWL made full restitution to PSL of the amount received from PSL, totalling over HK$16 million, pursuant to the court order.[6]

The applicant’s background and mitigation

17.  At the time of sentencing, the applicant was 46 years old, married with a three-year-old daughter, and had a clear record. He was educated to university level, holding a bachelor’s degree in electronic engineering and two master’s degrees in electronic and information engineering and in global finance. He had worked in science and information technology-related positions and had been employed by PCCW Services Limited from November 2014 until his resignation in January 2018, after which he continued to work in the field of information technology in other companies.[7]

18.  During mitigation, while accepting that the offence involved a breach of trust for which an immediate custodial sentence could properly be imposed, defence counsel submitted that the applicant was entitled to a further reduction in sentence in light of the full restitution he had made to the victim company, in addition to the full one-third discount for his timely plea.[8] Referring to the court order dated 8 December 2017 in HCA 2561/2017[9], instigated by PSL and its associated company, counsel pointed out that GGWL, the applicant, and his family had agreed to pay HK$16,307,363.28 and costs on an indemnity basis capped at HK$500,000, in full and final settlement of the claim, thereby fully repaying the sums received from PSL. PSL subsequently withdrew the civil proceedings on 9 July 2018.

19.  It was also submitted that the applicant had cooperated with internal investigations conducted by PSL[10], and that he should receive an additional discount for an unreasonable delay in prosecution, noting that he was not charged until September 2022 and was sentenced some seven years after his first arrest in September 2017.[11]

20.  As a further matter in mitigation, counsel relied on the impact on the applicant and his family, submitting that he developed suicidal thoughts at the end of 2023, having been re-arrested and charged about a year after the birth of his daughter, and that he had since been referred to the government clinic for adjustment disorder with prolonged depressive reaction and was receiving ongoing psychiatric medication and psychological counselling.[12]

21.  Counsel further urged the judge to take into account the applicant’s personal history, clear record and previous good character, supported by mitigation letters from his family and friends and documents recording his education, previous employment and voluntary work.[13]

The reasons for sentence

22.  The judge described the case as “a very bad case of breach of trust” that warranted a deterrent sentence, notwithstanding that the applicant’s full restitution to the victim company reflected his remorse.[14] Citing HKSAR v Cheung Mee Kiu[15] and HKSAR v Ng Kwok Wing[16], she noted that, in fraud cases involving a breach of trust and amounts exceeding HK$15 million, a sentence of over 10 years’ imprisonment would be appropriate. She also referred to HKSAR v Leung Chun Hei[17] and noted that, apart from the amount involved, other factors to be considered included the quality and degree of trust reposed in the offender, the period over which the fraud or the thefts were perpetrated, the effect on fellow employees or partners, and the offender’s personal history and the effect on him, and that pre-planning and conflict of interest were aggravating features[18].

23.  In the present case, the judge found that there was clear pre-planning and a conflict of interest, and considered that an appropriate starting point would be in the range of 5 to 6 years’ imprisonment. She regarded the applicant’s timely plea, full restitution and clear record as mitigating factors. While rejecting the contention that there was unreasonable or undue delay in prosecution, she accepted that the delay might have affected the applicant’s psychological state.[19] Taking all matters into account, she adopted a starting point of 5 years’ imprisonment and sentenced the applicant to 40 months’ imprisonment after giving him a one-third discount for his guilty plea.[20]

The grounds of appeal

24.  By subsequent letters dated 28 May and 20 July 2025, the applicant set out a series of complaints about his sentence, and by an affirmation dated 15 August 2025, he stated that he would adopt the letter dated 20 July 2025 as his written submission in support of his appeal. His grounds of appeal can be summarised as follows.

25.  First, the applicant complains that the judge wrongly applied the sentencing principles in Leung Chun-hei and failed to give sufficient regard to what he submits are “unique and exceptional” circumstances constituting “extraordinary features” which should have warranted a further reduction in sentence in addition to the one-third discount afforded for his plea. These are said to include his full and prompt restitution to the victim company, the impact on the company, his motive, and the duration of the offence. He contends that he lacked the requisite motive to commit the offence, claiming that he had not read the company policy in relation to conflict of interest and was unaware of the illegality of his acts until the investigation by the Independent Commission Against Corruption. He asserts that the impact on PCCW and its shareholders was minimal, relying on his restitution of over HK$16 million and payment of about HK$500,000 in costs, funded by his own resources and those of his family and friends, pursuant to an expeditious settlement in June 2018. He argues that this full and swift restitution achieved the “social effect of immediate full restoration” and led to PCCW withdrawing its claim and confirming no actual loss. Relying on HKSAR v Sham Khi Connie Rose[21], he submits that such early repayment of a very substantial amount is an “extraordinary feature” reflecting his genuine remorse and warranting a reduction in sentence. He further submits that his offending, which lasted about 1 year and 7 months, was shorter than in other comparable cases and should have attracted a more lenient sentence. However, it is noted that the period stated in the count is between 1 January 2016 and 7 July 2017. He argues that the judge should have applied the sentencing principles in Secretary for Justice v Leung Hiu Yeung and Others[22] to consider whether a community service order could appropriately have been imposed.

26.  Secondly, the applicant argues that his personal and family circumstances should have warranted a further reduction in sentence. He submits that there was considerable mitigation in his favour, in addition to his timely plea, including his previous good character and long-standing volunteer and charitable work, the psychological impact of the proceedings on himself and his family, which he alleges has led him, his wife and his mother to develop depression requiring long-term psychiatric treatment, and his responsibility for his young daughter. He contends that, after making full restitution, he secured new employment with an annual income of around HK$2 million and would have moved on but for his second arrest and the subsequent proceedings.

27.  Thirdly, the applicant complains that the overall sentence of 40 months’ imprisonment is manifestly excessive. He contends that, when compared with other fraud and theft cases involving larger amounts and lesser or no restitution but resulting in lighter sentences such as community service orders or shorter terms of imprisonment, “the ratio” between the sentences and the amounts involved was proportionally lower than in his case. He submits that he should have received a greater discount of 30% to 40%. He therefore contends that an appropriate sentence should be 14 months’ imprisonment.

Discussion

Breach of trust

28.  Ms Chong submits that the judge correctly characterised the case as a serious breach of trust and that the sentence is neither wrong in principle nor manifestly excessive.

29.  It is established that, in commercial fraud cases, an immediate and sufficiently substantial term of imprisonment should be passed to mark the gravity of the offence publicly, save in very exceptional circumstances or where the amount obtained is small: R v John Barrick[23]; HKSAR v Ho Ka Keung[24]; Leung Chun-hei[25].

30.  As remarked by the Court in Attorney General v Dominic Cheung Kai Man[26], the predominance of one or more factors identified in Barrick will enhance the seriousness of a particular case. The Court further identified four components of conduct that would place a fraud “within a broad band of the worst kind” where there is a combination of: (i) a breach of trust; (ii) a sum in the multi-million dollar range; (iii) commission by a person in a senior and responsible position; and (iv) an element of public impact. For other serious frauds not reaching that level, the Court indicated that a starting point in the region of 10 years’ imprisonment for a single offence after trial would generally be appropriate.

31.  Ms Chong submits that the judge properly considered the factors in Barrick in determining the starting point and final sentence, in particular, the false representations to senior officers of the PSL and the serious conflict of interest. She points out that the offending was carefully planned, involving elaborate deception and subterfuge over about one year and seven months, and that the applicant used his position within the company to execute a series of dishonest and fraudulent transactions for his personal gain, amounting to a gross breach of trust.

32.  By reference to the guideline bands in Cheung Mee Kiu and Ng Kwok Wing, and other authorities involving similar amounts[27], she submits that, given the substantial amount of over HK$16 million, the starting point of 5 years’ imprisonment and the sentence of 40 months’ imprisonment is neither wrong in principle nor manifestly excessive.

33.  I agree with her submissions and this also takes into account that the applicant made full restitution of the monies fraudulently obtained by him.

Full restitution

34.  The applicant relies on the Court of First Instance’s decision in Sham Khi Connie Rose, where the defendant pleaded guilty to seven counts of theft involving the unauthorised sale of her clients’ shares and stocks in an investment company totalling over HK$23 million over a period of eight years, and the use of the proceeds to repay her late son’s debts. The defendant was 88 years old and had a clear record. The judge accepted that the full restitution made by the defendant was an “extraordinary feature” in the case and took the exceptional approach by sentencing her to 160 hours of community service, which had been recommended in the probation officer’s report. This was an exceptional and unusual case that was decided on its own particular facts and circumstances. That was also the case with various other decisions the applicant refers to in his submissions.

35.  While full restitution in commercial crimes is recognised as a mitigating factor, the weight to be given to restitution in mitigation, and the size of any corresponding discount in sentence, depend on the facts and circumstances of each case: HKSAR v Cheung Suet Ting[28]; HKSAR v Leung Shuk Man[29].

36.  It was held in HKSAR v Chiu Peng [30] that “full and swift” restitution of a “very substantial sum”, where voluntarily made shortly after the offence and long before the prosecution is brought, may warrant an appropriate discount in sentence if, but for the applicant’s endeavours, it might otherwise have been “virtually impossible for the prosecution to have secured repayment”. In the present case, full restitution was made by the applicant in June 2018, before he was charged in September 2022, pursuant to a settlement reached after civil proceedings had been brought against him and others by the victim company.

37.  Ms Chong submits that the judge properly took into account the applicant’s full restitution by adopting a starting point of 5 years’ imprisonment, which was extremely generous in the circumstances given the sentencing guidelines for breach of trust cases. I agree with her submissions.

Personal and family circumstances

38.  Ms Chong submits that the applicant’s personal and family circumstances were of little or no mitigating value and that no further reduction in sentence is warranted. She relies on HKSAR v Chan Peter[31], where the Court observed that, while the impact of a sentence on an applicant and his family may be taken into account in mitigation, previous good character and the impact on his future career carry very little weight in breach of trust cases, given that the offender would not have been able to commit the offence but for his previous good character and should have foreseen the consequences of his conduct. She further submits that no reduction should be given on account of the adverse effect on the applicant’s family or his financial difficulties, which arose as a consequence of his offending.

39.  It appears that the judge took into account the applicant’s mental health and personal circumstances. She took a global approach in sentencing the applicant, and while she identified aggravating and mitigating factors, she did not specify any consequent adjustment to the sentence by reference to these factors. However, the starting point adopted by the judge was extremely low, and in light of the circumstances of the offence, the final sentence was not manifestly excessive.

Conclusion

40.  It follows from what I have stated that the application for an extension of time, and leave to appeal against sentence out of time is refused.

41.  The applicant is reminded of his right to renew his application for leave to the Court of Appeal, but he is also informed of the consequences of doing so, which may include a direction for any loss of time spent in custody pending his appeal, if the Court were to come to the view that there was no justification for the renewal of his application.