Four Jailed over HK Trading Conspiracy

Source: Financial Times

A Hong Kong court yesterday sentenced four people to up to 30 months in prison for conspiring to boost the market value of Asia Standard Hotelby HK$4bn ($516m) in the city's biggest market manipulation case.

The sentencing was the culmination of the latest case brought by the Securities and Futures Commission, the Hong Kong regulator, in an ongoing crackdown on market misconduct.

Chan Chin-yuen was sentenced to 30 months in prison. His sister-in-law Elaine Au Yeung and brother Chan Chin-tat and friend Chui Siu-fung received jail terms of 26 months each.

All four were ordered to pay HK8,400 each to meet the prosecution's investigation costs.

The four were found guilty on November 13 of conspiring to boost the share price of Asia Standard Hotel by 78 per cent in 2005. Asia Standard was not implicated in the charges.

The four traded shares among themselves to "produce a false picture of the depth and liquidity" of the hotel operator, according to the SFC.

"Today's sentencing sends the clearest possible deterrent message to those who wrongly think they can get away with defrauding the market and the investing public. The message is that they can't get away with it, they will be caught and they will go to jail," said Mark Steward, the SFC's executive director for enforcement.

The latest case is the first indictable prosecution for market manipulation in Hong Kong under the Securities and Futures Ordinance. Previous cases were not taken to the district court level.

According to the regulator, shares traded among the four from August 1 to September 5 in 2005, increased Asia Standard Hotel's market value by HK$4bn.

In September, the SFC scored one of its biggest victories against market abuses after Du Jun, a former Morgan Stanley investment banker, was given a record sevenyear sentence for insider dealing.

It followed the SFC's high-profile court battle against PCCW , the Hong Kong telecoms operator controlled by tycoon Richard Li. Mr Li was not personally accused or found guilty of any wrongdoing.

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Editor: Shanna Chu