THE QUEEN v. CHEUNG LONG CHUNG

___________

JUDGMENT

___________

Li, V.-P.:

1. This is an application for leave to appeal against sentence. The applicant was convicted of 14 counts of falsification of accounts with intent to gain either for himself or others or cause loss to others. It is not necessary to go into the details of his modus operandi. Suffice it to say that within a period of a year, namely between July 1981 to July 1982, on 14 occasions he caused his company accounts to be falsified in order to deceive the Commissioner of Deposit-taking Companies and also to cover up any infringement of the provisions of the Deposit-taking Companies Ordinance. The provisions of the Ordinance impose a limit on a deposit-taking company granting loans to related companies, to directors or to the limit of the paid-up capital and reserved of such company. In all 14 cases the falsification was to cover up such infringements. Had anyone of the infringements been discovered the Commissioner would have a duty to either suspend the operation or to revoke the licence of that company.

2. The applicant was to all intent and purposes the majority shareholder of the Current Finance Ltd. which infringed such provisions. The balance of the share was owned by his wife. He was also a majority share holder of the group of companies called CGB Group. Again his wife was the owner of the balance of the shares. In short, all the companies were totally owned between husband and wife. What the applicant did was that on any occasion where the Current Finance Ltd. had exceeded the limit of loans to either one of its related companies or to the director's account of any excess of the paid-up capital and reserved the applicant caused accounts to be falsified so as to show that the loan granted to an interrelated company or to the director's account was made to a person who was prepared to sign a bogus loan agreement. In this way the company, the Current Finance Ltd., was able to continue its operation, receive deposit money from the public who trusted that they would one day receive their deposit with interest.

3. Whatever use was made of the money that had been siphoned to the inter-related companies of Current Finance Ltd. or siphoned to the director's account we do not know. One thing is certain. It so happened by 1982/83 the property market suffered a depression. There were no further deposits made with the Current Finance Ltd. which had to stop business. That caused an investigation and these offences were uncovered. The applicant was a thoroughly dishonest person in every respect in the sense that he was granting loans to various people to whom he had no right to do. He was granting loans to companies to which he had no right to grant.

4. As a result of such illegal operation and the falsification of accounts no less than a total amount of $37 million had been placed upon Current Finance Ltd. There is only $7.4 million left for distribution. This means that depositors may retrieve only 10 to 20% of their respective deposits. This is a very serious offence and the learned trial judge in the court below imposed a sentence of 7 years imprisonment upon each count, sentences to run concurrently.

5. Learned counsel for the applicant has said all that can possibly be said on behalf of the applicant. The gravamen of the argument is that it would be manifestly excessive to impose a sentence of 7 years on one count which is the maximum sentence that can be imposed. He cites the case of Amos Dawe^(l). That was a case of conspiracy to defraud to the amount of some $91 million and another count of falsifying accounts to the extent of $91 million. Yet he was sentenced by another division, of this court to only 5 years imprisonment. We observe that in the case Dawe was acquitted in the first instance by the court below. The Attorney applied for a case stated so that this court could review on a point of law. Thus the man was twice in jeopardy. It was a merciful sentence. It appears that the 5 years sentence was imposed in accordance with the principle adopted in a review.

6. In this case, indeed, the learned trial judge imposed an overall sentence of 7 years on each count and made the sentences concurrent. We do not feel that the judge was taking 7 years as for only one count. He took a view that he should impose a sentence which reflect the appropriate totality of sentences. There are, of course, other ways of imposing a totality of 7 years sentence by a different method, e.g. lesser sentences for each count and making them consecutive. Having regard to the seriousness of the offence and the persistent conduct on the part of the applicant over a period of year, we fell that a totality of 7 years imprisonment is not manifestly excessive. Perhaps we should add that in sentencing one often hear mention of the theory of reformation and the theory of deterrence. But on the other hand one must not lose sight of the fact that a sentence might on occasions be imposed on the theory of retribution so as to reflect public indignation and public abhorrence. This is one of the cases where tens of millions of dollars had been lost to the depositors owing to selfish and dishonest conduct on the part of the applicant. We do not feel the sentence is excessive. For these reasons the application for leave to appeal against sentence is refused.

(1)    Crim. App. No. 960 of 1982