Lew Mon-hung ‘just helping’ out in US$225m share sale, court hears in fraud trial
Julie Chu firstname.lastname@example.org
30 April 2015
Businessman Lew Mon-hung said he was merely acting as a “white knight” to help a troubled listed company raise funds to buy a US oil field when he joined the firm and promoted the sale of its new shares, totalling US$225 million, a court heard yesterday.
Lew, a member of the National Committee of the Chinese People’s Political Consultative Conference, allegedly deceived the stock exchange and potential investors of Pearl Oriental Innovation.He became deputy chairman of the company in 2009 upon the invitation of chairman Wong Kwan, who needed money urgently for the Utah oil field, Lew told Independent Commission Against Corruption officers in a video interview shown in court.
“My position was such that I received zero salary [and my role was] only to raise funds to seal the deal,” Lew, 65, told the Court of First Instance. “Then I would get my reward. Other things were not my concern.”
Wong requested Lew’s help as he was known for his social network and could raise money from powerful people, Lew said. Pearl Oriental was facing delisting in 2009 as Wong had disputes with Li Xiaoyong, younger son of former premier Li Peng , over a Shanxi coal mine, he said.
He received 30 million new shares as his reward, he said.
Lew, Yik Siu-hung, 45, and Pearl Oriental deputy financial officer and administrative manager Kitty Yip Sui-kuen, 45, are charged with two counts of conspiracy to defraud and five of money laundering. Prosecutors alleged the oil field was bought for only US$60 million.
Lew testified Pearl Oriental based its investment decision on a valuation report showing the oil field was worth US$450 million and yet it needed just US$225 million to buy the land.
The firm issued three placements from December 2009 to April 2010.
Lew said he found it a good investment, so he persuaded former financial secretary Antony Leung Kam-chung’s Blackstone Group and the Chinachem Group’s Kung Yan-sum to buy the shares.
He said Wong found Yik, a woman unrelated to Pearl Oriental, to buy the land at only US$50 million and then to resell it to the company.
The trial continues before Madam Justice Anthea Pang Po-kam.