HKSAR v. MA CHUN-KIT

HCCC 20/2018

[2021] HKCFI 195

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 20 OF 2018

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Transcript of the Audio Recording
of the Sentence in the above Case

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COURT: The jury have found you guilty after trial of four offences of theft. Their verdict to you no doubt would not have been unexpected. This was and is an extremely serious breach of trust by you in stealing a colossal sum of $386,955,303.70 from your employer Hyundai Hong Kong over a period of about seven years between 20 April 2009 to 18 February 2016 by transferring the amounts of money in 260 transactions on the Internet banking online system using security tokens in the name of the Korean managers or managing directors without their knowledge.

During that time, you were the deputy manager in the accounting department, starting from 2010 at least. However, you were employed with Hong Kong Hyundai since 1992. The money stolen was from the account used to pay vendors or service providers of the company. You took it upon yourself to steal the money supposedly paid to the vendors to yourself.

The general managers and managing directors trusted you in dealing with the company’s moneys and appointed you as a system administrator of the online banking system since 2007. As system administrator, you were the one who received the tokens and were the one in charge of obtaining tokens from HSBC. You were able to create and obtain tokens issued to managing directors. Some general managers had even given you their own tokens and passwords to use whilst they were away on business trips and on holidays.

These tokens were used by you to steal the money. You used tokens which you were not authorised to use or obtain, and you transferred money to yourself without their knowledge or authorisation, and in doing so, sometimes changed the authorisation levels.

Although the company had a three-tier system using the tokens authorisation payment to vendor, they thought it safe, that is, you were the second approver not being able to make payments and only the Korean general managers were able to authorise the payment to vendors. This system was simply exploited by you. You were very much in charge of the accounting section dealing with payment to vendors. You were able to hide what you were doing from senior management. You only provided a balance of the bank statements. The management trusted you. They did not look at the detailed bank statements.

You kept hard copies of documents if the money to which you transferred to yourself. The payments to yourself could not be seen on the internal electronic SAP accounting system which showed payments to vendors. Once the money was deposited into your personal accounts, you almost immediately transferred the money to your other bank accounts or to pay your credit-card expenses to the tune of over $200 million. The credit card showed huge spending of money at casinos in Macau, buying luxury goods You bought properties in Hong Kong.

There was of course a lack of supervision. Understandably, they placed 100 per cent trust in you, as Mr Park said, in dealing with banking matters. This was purely a calculated and simple theft. You abused the trust the company placed in you for almost seven years. The fact that you were able to get away with it for so long is part of a reflection of the degree of trust that was placed in you. You took advantage of this lack of supervision and the trust they placed in you. This was, in my view, a wholly premeditated, calculating theft by a dishonest man that you are.

Since you have stolen the company money, you have deliberately hidden the money, spent it or, as we say in English, salted away the money, hidden it for future. That can be seen as is admitted in the first audio recording. As the company was getting closer and hotter on your heels to know that you had stolen money, you stole more. And as you say, you knew the company would check soon and so you planned for your future. You are so clever to have hidden the sums away in China under different companies, you have loss the moneys and you have put property in your girlfriend’s name in Australia. These are all admissions by you so that the company could not get back this money. As the evidence has it, you have not repaid a single penny.

When the manager, Mr B S Kim, asked you to provide your bank balance of your personal accounts, you answered, “We’ve got no money in Hong Kong actually here because I’m already thinking this day will happen, so I will not keep money in Hong Kong.” This is a deliberate, deliberate hiding of the money, a dishonest man that you are. It is clear that you think, as said in the audio, that $10 million is small money. Of course, it is small money compared to the money that you stole of $386 million. It goes without saying that B S Kim thought that was a very much surprise that you thought 10 million was small money.

Quite apart from not recovering any money from you, as Mr Cheung says in mitigation, the company has taken civil proceedings against you for the recovery of the money. After your arrest, defendant, in 2016, you continued in your dishonest ways. The civil court on 10 March imposed upon you what is called a restraining order, restraining you from dealing or disposing with your assets.

On 1 February 2018, the civil court found you guilty of contempt of court in breaching the order from disposing of your properties. Without informing the court, you deliberately cashed in insurance policies to the value of some $3 million and you spent it again on your lavish lifestyle even after your arrest. That was when you were on bail, surprisingly, on bail. The court there found that you spent money on personal services like massage parlours and nightclubs. In one particular nightclub bill, you spent $500,000. On a number of occasions, you spent huge amounts on Chanel, in the boutique.

You were sentenced already for that to 4 months’ imprisonment which has nothing whatsoever to do with this case. You have been punished for that, but why I refer to that case, is it just goes to show that even after your arrest, defendant, whilst you were on bail, you continued with your dishonest ways. Whatever money you had of the company and you invested was put in your life insurance. You still cashed in that insurance and used it. It is simply the dishonest man that you are.

Furthermore, in this case, as you are quite right and have the right to do, you have pleaded not guilty. That is how the system in Hong Kong works. The evidence in this case against you, defendant, was overwhelming. Your defence was completely hollow. The jury have decided on two charges unanimously that you are guilty. On the other two charges, it was a majority verdict. Taxpayers’ money has been used to fund you, your legal representation in this trial while you have salted away the money.

So far as the authorities show, as Mr Cheung has said, there has never been a case in Hong Kong that an employee has stolen this amount of money. This is a serious breach of trust.

I have had the case referred to me by Mr Cheung of HKSAR v Navin-Kumar Aggarwal, HCCC 57/2013, and Mr Cheung asked me to look at that case in sentencing you. In that case, the sum was one $572 million loss in a case of fraud.

I accept that this is a case of theft and the maximum penalty is one of 10 years’ imprisonment. You have been charged with four separate offences of theft. Each charge was pertaining to different dates, different periods of time and different amounts and concerned different evidence. They are separate and distinct offences. In respect of the amounts, they too were of differing amounts. The period of theft was committed almost over a period of seven years. I can think of no worse case than this case, defendant, how you could have just spent all that money on casinos or gambling or to others.

Looking at what I see is the appendixes in the treasury accountant’s report and the amount of spending you did, I do not know how you were even able to do any work at Hyundai, how were you able to carry out your functions when you were spending all this money in Macau, using all this company time to transfer funds to pay for your exorbitant, luxurious lifestyle, I do not know how you managed to work or if you did any work at all, but the only work you seemed to do was to steal money from the company. That is probably the extent of your work for all those years.

It was such a simple theft. You had others to work for you like Ms Tsang and Ms Ling who were the creators of payment. All you needed to do was approve it. Then it would go to general managers. In the meantime, you spent your time no doubt making all those numerous transactions online banking to your own account. Those transactions just show how much time you must have spent on your own in your workplace.

This case - I will borrow the words of Macrae JA in the judgment of Cheung Curtis Ka Kim - “is an egregious example of selfishness and greed” in which you, defendant, have not shown “one ounce of remorse”. You have fought against the inevitable consequence of your acts and failed to repay any sums whatsoever to the victim, Hyundai Company. The stealing of the money, no doubt you spent on a lavish lifestyle, and as I mentioned, even after your arrest, you could not help yourself but to continue your lavish lifestyle.

You are a Form 5 graduate, having a two-year accounting certificate and are 50 years old. You earned approximately $50,000 a month. How you became used to this luxurious lifestyle beggars belief. You are of clear record, but I find there is absolutely no mitigating factors in this case.

The sentencing for theft and breach of trust involves guidelines set down by the Court of Appeal and revised in Ng Kwok Wing [2008] 4 HKLRD. The only starting point relevant here is amounts involving $15 million or more is 10 years or above.

The amounts involved in this case far, far exceeded those amounts. For Charge 1, defendant, you stole $52,269,096.13. For Charge 2, you stole $20,183,067.14. For Charge 3, you stole $216,713,855.20. For Charge 4, you stole $97,789,285.23.

To reflect the severity of the offences, I consider the sentences should run partly consecutive and partly concurrent. Mr Cheung has asked me not to take the maximum sentence. I cannot see how I cannot take the maximum sentence in this case to sentence you on each charge. The amounts that you stole are far above $15 million which warrants a sentence of 10 years’ imprisonment. Therefore, I will sentence you to reflect the severity of the offences to which you have committed.

Defendant, on Charge 1, you are sentenced to 10 years’ imprisonment.

On Charge 2, you are sentenced to 10 years’ imprisonment. On Charge 3, you are sentenced to 10 years’ imprisonment. On Charge 4, you are sentenced to 10 years’ imprisonment. To reflect the global term of your -- the seriousness of your culpability, I shall order Charges 1 and 2 to run concurrent to all charges. In Charge 3, 5 years is to run consecutive to Charge 4 and the remainder concurrent, and Charge 4, 10 years concurrent, which means that you will serve a total term of 15 years’ imprisonment.