HKSAR v. WONG YAT MAN, SUNNY

CAC C 16/2016

[2018] HKCA 35

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 16 OF 2016

(ON APPEAL FROM DCCC NO. 73 OF 2015)

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REASONS FOR JUDGMENT

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Hon Yeung VP (giving the Reasons for Judgment of the Court):

Introduction

1.  The applicant (Wong Yat Man, Sunny) together with Tsang Kwong Kan (KK Tsang) and Tsang Yau May (YM Tsang) appeared before Judge Woodcock (the judge) in the District Court on an indictment consisting of two charges.

2.  The 1^st charge alleged that, between 22 July 2011 and 13 February 2012, the applicant together with KK Tsang and YM Tsang conspired to defraud Maryo Development Limited (“Maryo”) and its shareholder by dishonestly causing and permitting Maryo to purchase 200 pieces of jade ornament from the applicant for $12 million and dishonestly causing and permitting Maryo to pay $10.13 million to the applicant.  The 2^nd charge alleged that, between 22 July 2011 and 28 June 2012, the applicant dealt with the $10.13 million, knowing or having reasonable grounds to believe that the monies in whole or in part directly or indirectly represented the proceeds of an indictable offence.

3.  The applicant, KK Tsang and YM Tsang pleaded not guilty to the charges.  On 15 January 2016, the judge convicted the applicant and YM Tsang, but acquitted KK Tsang of the 1^st charge.  The judge also convicted the applicant of the 2^nd charge.

4.  The applicant and YM Tsang sought leave to appeal against conviction.  On 28 February 2017, their applications were dismissed by a single judge of the Court of Appeal.  YM Tsang and the applicant both renewed their applications for leave to appeal against conviction.  The applicant’s renewed application dated 9 March 2017 was only received by the court on 15 March 2017 and was therefore out of time by a few days.

5.  On 11 April 2017, YM Tsang lodged a Notice of Abandonment abandoning all further proceedings and her renewed application for leave to appeal against conviction was thus dismissed and we only have to deal with the applicant’s renewed application for leave to appeal against conviction out of time.

6.  As the applicant’s renewed application for leave to appeal against conviction was out of time by a few days, we would ignore such delay and deal with it on its merits as suggested by Mr Derek Wong, Senior Public Prosecutor, for the respondent.  At the end of the hearing, we dismissed the renewed application and indicated that we would hand down our reasons in due course.  This we now do.

The Primary Facts

7.  Maryo was incorporated on 14 October 1988.  Tsang Kwong‑Lik (KL Tsang) and YM Tsang were its only registered directors and shareholders, holding 998 shares and 2 shares respectively.  KL Tsang, the half-brother of YM Tsang and KK Tsang, died intestate on 4 December 2001 and on 8 December 2001 YM Tsang appointed KK Tsang to replace KL Tsang as Maryo’s director.  YM Tsang and KK Tsang, in effect, took control of Maryo although KL Tsang remained its majority shareholder.

8.  KL Tsang’s estate became the subject matter of a protracted and vigorous litigation between his stepmother, Madam Ho (the mother of YM Tsang and KK Tsang) and KL Tsang’s biological mother, Madam Leung.  Madam Ho claimed that she was the jimu/step mother of KL Tsang under Chinese Customary Law and that Madam Leung had ceased to be KL Tsang’s mother after his father had divorced Madam Leung and elevated Madam Ho to become his new principal wife in a fuzheng ceremony despite the fact that Madam Leung was KL Tsang’s biological mother.  Madam Ho claimed to be entitled to KL Tsang’s estates.

9.  The litigation between Madams Leung and Ho started in 2004 and Madam Ho’s claim was dismissed by A Cheung J (as he then was).  Madam Ho’s appeals to the Court of Appeal and the Court of Final Appeal were respectively dismissed on 10 April 2008 (Leung Lai Fong v Ho Sin Ying [2008] 5 HKLRD 195) and 24 July 2009 (Leung Lai Fong v Ho Sin Ying [2009] 12 HKCFAR 581).  In accordance with the judgments of the courts, Madam Leung was entitled to inherit KL Tsang’s residual estate absolutely under s 4 of the Intestates’ Estates Ordinance, Cap 73.  However, Madam Leung died on 17 May 2009 before the Court of Final Appeal handed down its judgment.  KL Tsang’s estate was eventually granted to Madam Leung’s daughter (KL Tsang’s half‑sister), Madam Chan Yui Ling (Madam Chan) in July 2010.

10.  Madam Chan had made many requests to YM Tsang to transfer the 998 shares in Maryo, being part of KL Tsang’s estates, to her but it was not done.  A court order was required and the 998 shares were formally transferred to her on 5 March 2012.  More litigation was required for Madam Chan to be appointed a director of Maryo to enable her to have access to its accounts.  YM Tsang and KK Tsang were removed as directors of Maryo on 18 January 2013.

11.  It was not disputed that Maryo did not do any business, but owned two properties which were rented out.  The two properties were sold in 2003, two years after KL Tsang died and the proceeds were put into Maryo’s Wing Lung Bank account of which KK Tsang and YM Tsang were its only authorized signatories.  In June 2006, Maryo had $12.3 million in the account and the auditor confirmed that it had no turnover and did not do any business.

12.  On 14 September 2010, the applicant purchased Bright Jade International Limited (Bright Jade), an “off the shelf” company and became it sole director and shareholder.  On 28 September 2010, the applicant opened a Business Account for Bright Jade with Hang Seng Bank and became the sole signatory to the account.  He also opened personal accounts with Wing Lung Bank in July 2011.  The applicant was the sole signatory to those accounts.

13.  On 5 October 2010, less than a month after the applicant acquired Bright Jade and less than three months after the Court of Final Appeal adjudicated on the inheritance of KL Tsang’s estate, Maryo and Bright Jade entered into a co‑operation agreement for jade and other businesses.  Under the agreement, $10 million was loaned to Bright Jade by Maryo.  A cheque dated 5 October 2010 for $10,000,000 drawn on Maryo’s Wing Lung Bank account was paid into Bright Jade’s Hang Seng Bank account.  After the payment, only $842,000 was left in Maryo’s account.

14.  The $10 million in Bright Jade’s account was returned to Maryo by a cheque dated 3 May 2011 drawn on Bright Jade’s Hang Seng Bank account.  On 9 May 2011, Maryo also issued a cheque for $1 million as a loan to YM Tsang.  There was no record of Maryo doing any business in the intervening months.

15.  In July 2011, YM Tsang and KK Tsang, purportedly on behalf of Maryo, executed an agreement with the applicant to purchase 200 pieces of jade from him at the price of $12 million.  A cheque dated 18 July 2011 for $9 million drawn on Maryo’s account and a further sum of $1 million from YM Tsang, totaling $10 million was paid into the applicant’s personal account which was opened on the same day.  Under the agreement, the balance of $2 million and interest were to be paid by 12 equal monthly installments and only $130,000 was paid to the applicant on 13 February 2012.  The applicant was owed $1.87 million under the agreement.

16.  Four days after the $10 million was paid into his personal account, the applicant applied to deregister Bright Jade from the Companies Registry and it was officially deregistered on 24 February 2012.  There was no indication of the applicant taking any step to recover the balance of $1.87 million under the agreement from Maryo.  Of the $10.13 million paid to the applicant, $2.3 had been withdrawn by him and the balance of over $7 million remained in his account.

17.  In May 2012, Madam Chan found out that there was only $5,000 left in Maryo’s account and the matter was reported to the police.  The applicant was arrested and upon being cautioned, he denied that he had any business dealings with Maryo.  His responses were post‑recorded in the police notebook.  The police searched YM Tsang’s residence and found 200 pieces of jade in unlocked plastic boxes in a blue nylon bag in her living room next to piles of old newspapers.  The police also found a photo album in the applicant’s home showing members of Madam Chan’s family, including Madam Leung and KL Tsang dating back to the 1980s.  The photo album was prepared by Madam Chan in connection with the litigation over the estates of KL Tsang.

The Prosecution’s Allegation and Evidence

18.  The prosecution alleged that YM Tsang and KK Tsang had conspired with the applicant to dissipate the assets of Maryo, part of KL Tsang’s estates to avoid them going to Madam Leung’s estate by creating a sham transaction between Maryo and the applicant under which Maryo purportedly purchased 200 pieces of jade from the applicant for $12 million when those pieces of jade were worth only a fraction of the price.  The transaction, if successful, would have almost completely depleted Maryo’s assets.  The prosecution also alleged that the applicant obtained $10.13 from Maryo knowing it was a payment under a sham transaction and he was a knowing party to the conspiracy to defraud Maryo.

19.  In support of its case, the prosecution relied on the timing of the transaction, the expert’s evidence on the true value of the 200 pieces of jade, the fact that the applicant never asked for the payment of the balance of the purchase price, the applicant’s acquiring and deregistration of Bright Jade as well as his conduct when he was arrested.

The Evidence

20.  Apart from the aforesaid primary facts which were largely undisputed, the prosecution called a number of witnesses.  Maryo’s auditor confirmed that Maryo had no business between 2006 and 2011.  He accepted that there was no evidence of false accounting and that the company’s accounts were accurate.  The officers who arrested the applicant gave evidence to the effect that when they knocked on the door of the applicant’s 300 sq ft apartment and revealed their identities, there was no response.  When they telephoned his mobile telephone, the applicant did not answer although the ringing sound could be heard.  It was only after over an hour and when assistance for breaking open the applicant’s apartment with force was sought that the applicant opened the door.

21.  According to PC 5525, when the applicant was arrested and cautioned, he said he had not done any business with Maryo.  When PC 5525 made a post record of his response (P49 and 49A) and read it to him, the applicant refused to sign on it.  The applicant also said he could not read the post record and after both PC 5525 and Sergeant 53526 read it to him, the applicant still refused to sign.

22.  Sergeant 53526 confirmed that he had given six loud verbal warnings within a period of 2 hours and threatened to break in before the applicant opened the door to let the police into his apartment.  Sergeant 53526 also confirmed that PC 5525 wrote out the post‑record and both he and PC 5525 had read it to him, the applicant refused to sign.

23.  Madam Chan detailed the difficulties she encountered in trying to obtain Letters of Administration of KL Tsang’s estate and the transfer of the 998 Maryo shares to her.  She said after she successfully gained control of Maryo, she requested YM Tsang and KK Tsang to explain the whereabouts of the money in Maryo’s account, but her requests were ignored.  She said despite the decision of the Court of Final Appeal, she was not consulted about Maryo’s investment in jade or any other business after she had been granted administration of KL Tsang’s estate.  She said she knew nothing about Maryo’s financial position until she obtained Maryo’s bank statements with a court order and discovered that the money in the account had disappeared.

24.  With the approval of the judge, Professor Ou Yang Chiu‑mei gave evidence for the prosecution as an expert.  Professor Ou Yang, in her evidence, detailed her experience and qualification in the valuation of jadeite.  Professor Ou Yang had personally examined the 200 pieces of jade in question and in her opinion, most of the 200 pieces of jade were of low/medium grade with a total value of $467,200 in 2013 and $520,160 in 2015.

The Defence Case and Evidence

25.  The defence suggested that the sale of the 200 pieces of jade from the applicant to Maryo was a genuine transaction and therefore Maryo had not been defrauded.

26.  KK Tsang’s case was that he was only involved in name with Maryo and knew nothing about the dealings between Maryo and Bright Jade.  His case was that he was acting on the instruction of YM Tsang.  He said he was not involved in the litigation in connection with KL Tsang’s estate and knew nothing about it. He suggested that he did not agree with the purchase of the 200 pieces of jade from the applicant to drain Mayro’s bank account and thus depriving Madam Chan of her beneficiary interest in Mayro.

27.  YM Tsang denied conspiring with KK Tsang and the applicant to defraud Mayro.  She said she had sought legal advice and was told that she could do business in Maryo’s name as a shareholder and director before she made the contract with the applicant to purchase the 200 pieces of jade for $12 million.  In a statement to the police, YM Tsang said KL Tsang had always wanted to get involved in the jade business as their father did and she was trying to fulfil his wish.  She said KL Tsang had told her before he died that she could make all investment decisions, but she was unable to do so due to the litigation.  Eventually she decided to get involved with Bright Jade and the applicant as the jade market was profitable due to the dwindling supply of jade.

28.  YM Tsang even suggested in the statement that Mayro’s asset in fact came from her mother, Madam Ho and therefore Madam Ho should own most of the interests in Mayro.  She said Madam Ho had told her to oversee the business and development of Mayro and that KL Tsang had told Madam Ho that all surpluses from Mayro could be used to meet her living expenses and as a pension for herself and her husband.  The suggestion was that the asset in Mayro belonged to Madam Ho and that based on legal advice, she operated Mayro as usual, including the purchase of the 200 pieces of jade from the applicant.

29.  YM Tsang further wrote in the statement that she intended to open a jade shop to make money and that she had intended to rent a safe deposit box to store the 200 pieces of jade although she considered it safe to keep them at home as she lived above a bank and across from a police station.  She denied having committed any crime and what she did at most would only lead to a civil dispute.

30.  The applicant’s case was that the 200 pieces of jade were sold to Maryo in a genuine business transaction.  He suggested that even if the 200 pieces of jade were not worth the price of $12 million, what he did was not criminal.  He emphasized that according to his expert, the price of jade might fluctuate 10 to 20 times, depending on the market trend and supply and demand.  He said he knew nothing about the litigation concerning KL Tsang’s estate nor any attempt to defraud Maryo.  The applicant denied that he was a knowing party to the conspiracy to defraud Maryo even if Maryo had been defrauded or that he had knowingly laundered the proceeds of an indictable offence.

31.  The applicant also denied that he had tried to delay the police’s entry into his apartment.  On the special issue, the applicant said on the day of his arrest, he had not slept well all night and after drinking brandy at 5 am, he had fallen asleep on a sofa and did not hear the police knocking on the door.  After waking up at 9 am, he dressed and washed, intending to go out to get some food and it was only when he opened the door, he saw the police officers.  The police then suggested that he had defrauded Maryo of $13 million and had pocketed $7 million and divided up the balance with others.  The applicant said he denied the accusation.  The applicant said he only denied doing business with a company called “Cheuk Yuet” and he was not asked about doing business with Maryo.  He said he was asked to sign on the police notebook and he refused as he had never been shown the contents or had it read to him and he had no idea what had been written.  He said he also refused to sign the notice to persons in custody as he had never been cautioned.  The applicant challenged the admission of the notebook entry as evidence.

32.  Neither the applicant nor YM Tsang gave or called any evidence on the general issue.  KK Tsang gave evidence to support his case.  He emphasized that he was not privy to the purchase of 200 pieces of jade from the applicant and he had never seen any of them.  He denied the suggestion that he knew that the 200 pieces of jade were not worth $12 million or that he was part of the conspiracy to remove money from Maryo’s account by fabricating what appeared to be a legitimate business dealing in order to defeat the decision of the Court of Final Appeal and to deprive KL Tsang’s estate of the fruit of the litigation.

33.  YM Tsang and KK Tsang called Mr Simon Sham and the applicant called Mr Chung Yam Ming, Daly as experts on the value of the 200 pieces of jade in question.

34.  Mr Sham opined that the 200 pieces of jade in question were worth a total of $10 million to $13.5 million in 2015 which was 35% to 38% higher than their value in 2011 although he had not examined them for genuineness and had spent only about 2 minutes on each piece.  He said he valued each piece of the jade by going out to different jewelers as a potential buyer to look for similar pieces and noted their prices.  He would then attach the prices of comparable pieces of jade to 150 pieces of jade, out of 200 pieces in question.

35.  Mr Chung, the applicant’s expert, in his first report prepared for civil proceedings, took the view that the 200 pieces of jades in question were genuine, but their total value was just $1.1 million to $1.4 million although he emphasized that it was hard to value jade and that a willing buyer might offer a much higher price than the estimated one.  He also said the price of jade could fluctuate 10 to 20 times higher than the estimate, depending on the market trend and the question of supply and demand.  In his supplemental report, Mr Chung said high end shops would price the jade higher than shops in Jordan and Shamshuipo and the difference could be 10 to 20 times.

36.  Both Mr Sham and Mr Chung agreed that Professor Ou Yang was a worldwide leading authority on jadeite.

The Judge’s Findings

37.  The Judge accepted Professor Ou Yang’s evidence in its entirety and valued the 200 pieces of jade at $467,200 in 2013 and $520,160 in 2015, having carefully analyzed her evidence and comparing her evidence with those of Mr Sham and Mr Chung.  The judge pointed out that Mr Chung valued the 200 pieces of jade at between $1.1 to $1.4 million which was less than 10% of Mr Sham’s valuation.  The judge did not accept Mr Chung’s suggestion that price of jade could fluctuate higher by 10 to 20 times.  The judge concluded by saying that even on Mr Chung’s valuation, the price paid by Maryo for the 200 pieces of jade was $10 million more than their true value.  The judge did not accept the evidence of Mr Sham because of his qualification and his methodology in valuing the 200 pieces of jade.

38.  The judge emphasized that when Madam Chan was asking for the transfer of the 998 shares in Maryo, a 10‑year co-operation agreement was executed to lend $10 million, almost the entire asset of Maryo, to Bright Jade without consulting Madam Chan, Maryo’s de facto owner.  At that time, Bright Jade had no assets, no business record and no expertise, yet the agreement suggested that Bright Jade, a newly acquired “shelf company” would provide all relevant equipment, facilities, market information and expertise in businesses that Bright Jade and Maryo had never dealt in.  The judge pointed out that the entire loan of $10 million was repaid 7 months later in May 2011 without any explanation.  The judge emphasized that two months later on 22 July 2011, the applicant purportedly sold 200 pieces of jade to Maryo for $12 million and $10 million was paid and deposited into the applicant’s account which was opened on the same day and that four days later, the applicant applied to deregister Bright Jade.  The judge concluded that the applicant had acquired Bright Jade for the sole purpose of dealing with Mayro as it did not do any other business before it was deregistered.

39.  The judge pointed to the inflated price of the 200 pieces of jade purportedly sold to Maryo, the timing of the transaction, the applicant’s behaviour and the lies he told at the time of his arrest, the way he dealt with Bright Jade and his failure to chase Maryo for the balance of the purchase price.  The judge found that YM Tsang, with full knowledge that Madam Chan was entitled to the shares and assets of Maryo, deliberately dissipated such assets so that its shares would worth very little in order to deprive Madam Chan of the fruit of her success in the litigation relating to KL Tsang’s estate.  The judge also found that the applicant had knowledge of the litigation concerning KL Tsang’s estate and that the evidence as a whole led to the only irresistible inference that he had conspired with YM Tsang to defraud Maryo and that he was acting dishonestly.  The judge further found that the applicant had dealt with the $10.13 million knowing that the monies were obtained as a result of the fraud against Maryo.

40.  The judge therefore convicted the applicant of both charges 1 and 2.

Grounds of Appeal

41.  Mr Kenwick Yam, on behalf of the applicant submitted that the judge was wrong to infer that there was a conspiracy between YM Tang and the applicant to defraud Maryo.  Mr Yam argued that from the applicant’s perspective, the inflated selling price of the 200 pieces of jade, his inactive attitude in not chasing Maryo for the remaining $1.87, the applicant’s behaviour at the time of his arrest and the way he acquired and then deregistered Bright Jade might not necessarily lead to the only irresistible inference that the applicant was a party to the conspiracy to defraud Maryo.

42.  Mr Yam suggested that there could be other innocent explanations for the applicant to behave in the manner as he did.  Mr Yam argued that the judge was wrong in taking into consideration the presence of a family photo album of YM Tsang and KK Tsang in the applicant’s home as evidence against him.  He suggested that the existence of the photo album could be an indication of a personal link between the applicant and YM Tsang and not a conspiracy to defraud Mayro.  Mr Yam submitted that it was possible that the applicant was not aware of the protracted litigation between YM Tsang and Madam Chan and that if the judge had considered that there was no sharing of the $10.13 million, he would not have inferred that the applicant was a party to the conspiracy.  Mr Yam also submitted that it was possible that the applicant only had the intention to make profit even though YM Tsang did want to dissipate Maryo’s asset.

43.  Mr Yam submitted that the 1^st and the 2^nd charge should stand and fall together and as the applicant was not guilty of the 1^st charge, he should be acquitted of the 2^nd charge too.

Discussion

44.  Mr Yam did not challenge the judge’s findings of primary facts.  He did not suggest that the judge was wrong to find that Maryo had been defrauded $10.13 million.

45.  It is perhaps not surprising that Mr Yam would adopt such an attitude.  KL Tsang was a director and held 98% shareholder of Maryo.  Days after his demise, YM Tsang appointed her brother to replace him as the other director and the two of them had full control of the company.  Their mother, Madam Ho obviously did not want KL Tsang’s estate to be left to anyone else and engaged in a prolonged litigation with KL Tsang’s biological mother Madam Leung with a view to take control of his estate.

46.  When attempts to seize KL Tsang’s estate through legal proceedings finally failed in July 2009 and despite the various requests by Madam Chan, KL Tsang’s lawful administrator, to regain the 998 shares and the control of Maryo, YM Tsang and KK Tsang refused to co‑operate and a court order was required to compel them to recognize Madam Chan’s status.

47.  Three months after Madam Chan was officially granted the administration of KL Tsang’s estate in July 2010, YM Tsang and KK Tsang, as directors of Mayro, executed a co‑operation agreement to lend $10 million, without any collateral, to Bright Jade, a newly acquired shelf company with no record of any business dealing.  It must be remembered that Mayro had not been engaging in any business activities for a long period of time and the $12 million in its account represented almost its entire assets.  There was no logical or any explanation for such an usual step to be taken.  Bright Jade returned the $10 million to Maryo after 7 months later in May 2011 and again there was no explanation for the unusual arrangement.

48.  In July 2011, there was the purported sale of 200 pieces of jade by the applicant to Maryo at a highly inflated price (on the judge’s findings, twenty times its true value) and $10 million was paid to the applicant into an account opened on the same day.  Despite the purported value of the 200 pieces of jade that were purchased for $12 million, they were not treated as valuable items by YM Tsang.

49.  It may not be necessary to speculate the reason for giving up the co-operation agreement and in its place, devising the sale of the 200 pieces of jade to dissipate practically the entire assets of Maryo.  It is likely that from the perspective of the fraudsters, the sale of the jades, as a means to defraud Maryo was a safer one than the co‑operation agreement as, unlike other commodities, it was difficult to put a definite value to jade as all the experts seem to agree.

50.  If the plan had been successful, the entire asset of Maryo would have been dissipated.  There had clearly been an attempt to defraud Maryo and the only issue is whether the judge was right to conclude as she did that the applicant was a knowing party to the scheme to defraud Maryo.  Mr Yam agreed with such an observation.

51.  There was no explanation for the unusual steps taken by the applicant with regard to the acquiring and the deregistration of Bright Jade or the borrowing of the $10 million under the co-operation agreement.  There was no indication that the applicant had engaged in jade business and there was no document relating to the acquiring of the 200 pieces of jade by the applicant and the price he had paid for them.  The acquiring and deregistration of Bright Jade and its dealings with YM Tsang and KK Tsang as well as with Maryo were highly suspicious and required explanation, yet none was forthcoming as the applicant chose not to give evidence or call any witness.

52.  According to Professor Ou Yang whose evidence the judge accepted, the $12 million paid by Maryo to the applicant for the 200 pieces of jade represented an inflated price of 20 times their true value.

53.  The applicant’s behaviour when the police tried to gain entry into his residence with a search warrant and his denial of any business dealing with Maryo could be an indication of his awareness of his involvement in the fraud against Maryo.  The applicant’s failure to chase for the balance of the purchase price could also be an indication that the sale of the 200 pieces of jade in question was not a genuine one.  The presence of the photo album in the applicant’s apartment may not be very important, but it is an indication that the applicant was aware of the litigation over the estate of KL Tsang.  Of the proceeds of the fraud, $2.3 million was withdrawn and not accounted for.  The absence of evidence to show the sharing of the balance of over $7 million may be due to the monies being frozen after the matter was reported to the police.

54.  The suggestion that YM Tsang and the applicant had different motives (YM Tsang wanted to dissipate Maryo’s assets whereas the applicant only wanted to make a profit) or that the applicant was used by YM Tsang as a tool was unconvincing.  It was unlikely that YM Tsang would have committed the fraud unless she could be financially benefitted and she could not have achieved her aim unless the applicant was a party to the fraud.  The suggestion that YM Tsang, in order to take vengeance on and to air her grievance against Madam Chan, would deliberately allow the applicant to obtain a sudden windfall of over $10 million was equally unconvincing.  It must be remembered that YM Tsang herself had a 2% interest in Maryo.

55.  Each of the incriminating factors identified by the judge, considered separately, may not be decisive.  But those factors, considered in their entirely, in our view would lead to the only irresistible inference that the applicant was a knowing party to the fraud against Maryo and that he was acting dishonestly, when there was no evidence from the applicant to explain, challenge or contradict the prosecution case against him.  The absence of explanation would no doubt strengthen the inference to be drawn against the applicant from the prosecution case. (See the judgment of the Court of Final Appeal in Li Defan & Anr v HKSAR (2002) 5 HKCFAR 320 at p.335 F)

56.  We were satisfied that the conviction against the applicant on the 1^st charge of conspiracy to defraud Maryo is a safe one.  When the applicant dealt with the $10.13 million deposited into his personal account, he must have known that the monies were proceeds of the fraud against Mayro as he was a party to the fraud.  Mr Yam had conceded that the 2^nd charge must stand together with the 1^st charge.  The conviction of the applicant on the 2^nd charge is also a safe one.

57.  The renewal application for leave to appeal against conviction out of time on both charges was therefore dismissed.