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Hksar v Chen Keen (Alias Jack Chen) And Others

Judgment Cited authorities 12 Cited in Precedent Map Related
Vincent
Judgment Date02 December 2020
Neutral Citation[2020] HKCFI 3013
Judgement NumberHCCC309/2019
Subject MatterCriminal Case
CourtCourt of First Instance (Hong Kong)
HCCC309/2019 HKSAR v. CHEN KEEN (alias JACK CHEN) AND OTHERS

HCCC 309/2019

[2020] HKCFI 3013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 309 OF 2019

__________________

BETWEEN

HKSAR

and
CHEN KEEN
(alias JACK CHEN)		 1st Accused
HAO MAY
(formerly known as WANG MAY YAN)
(alias MAY WANG)		 2nd Accused
YEE WENJIE
(also known as YU WENJIE)
(alias ERIC YEE)		 3rd Accused

__________________

Before: Deputy High Court Judge Bruce SC in Chambers

Dates of Hearing: 17 and 24 August 2020

Date of Ruling: 2 December 2020

_______________________________________________

APPLICATION FOR RECUSAL: RULING

_______________________________________________


INTRODUCTION

1. Chen Keen, Hao May and Yee Wenjye, D1, D2 and D3 respectively, face charges of conspiracy and money laundering.

2. A trial is scheduled to commence in mid-January 2021 and is expected to last something of the order of 6 months. I have been assigned to be the trial judge of this proceeding.

3. On 17 August, 2020, the prosecution applied for me to recuse myself. The grounds upon which that application was made are articulated in a little more detail later on in these reasons, but essentially it is that I represented Wu Wing Kit on a charge of what is colloquially called money laundering in the District Court. He was, at material times, the solicitor of D1 and D2 and, so the prosecution contends, must have been aware of their dishonest dealing in pursuance of the conspiracy.

4. Counsel for each of the accused in the present case submitted that the prosecution has not made out its case and that the application for recusal be dismissed.

5. Both sides agree that as the trial is a large one and involves, on both sides, the deployment of considerable resources, a decision on this application is needed quickly.

PROCEDURAL HISTORY

The trial of Wu Wing Kit

6. Wu Wing Kit faced a charge of what is colloquially called money laundering, contrary to section 25 of the Organised and Serious Crimes Ordinance, Cap. 455. He was tried before a judge of the District Court and convicted. I represented him at that trial.[1] I had no part in his representation prior to the commencement of the trial before the District Court and, following his conviction. Other counsel represented him on appeal to the Court of Appeal and the retrial that was ordered. The charge faced by Wu Wing Kit was that:

“…between 11th day of March 2010 and the 12th day of March 2010 … knowing or having reasonable grounds to believe that property, namely a chose in action in the sum of $68,950,000 Hong Kong currency, being a credit balance in the account numbered … maintained with the Hongkong and Shanghai Banking Corporation Ltd in the name of Fred Kan & Co Client Account, in whole or in part, directly or indirectly, represented the proceeds of an indictable offence, dealt with the said property.”

7. A useful Summary of the Facts and circumstances of the trial of Wu Wing Kit, which I conducted, appears in the judgment of the Court of Appeal on his appeal against conviction.[2] I have not included in the summary references to the case of Ye Fang.

8. The summary of the Court of Appeal of the facts and circumstances of the case at trial is as follows:[3]

“The trial

The 1st, 2nd appellants and Jack Chen

11. Jack Chen was the husband of the 2nd appellant and had been a client of the 1st appellant11 since 2005.

462

12. Jack Chen was the executive director and joint chairman of China Jin Hui Mining Corp Ltd (CJHM), later renamed Natural Dairy (NZ) Holdings Ltd (NDNZ), a publicly listed company in Hong Kong. At trial, it was referred to by its stock code number, namely 462, which reference is used in this judgment. 462 held a subsidiary company, Nation Resources Ltd (NRL). On 15 September 2009, Jack Chen resigned as an executive director and joint Chairman of 462.

Goldmate

13. Jack Chen was also the majority shareholder and a director of Goldmate Securities (USA) Ltd (Goldmate), previously named Shenlong International Investment Ltd.

The 1st appellant: Fred Kan & Co

14. The 1st appellant was a solicitor practising in Hong Kong and a partner of the firm Fred Kan & Co. (FKC).

The 2nd appellant: Dragon Joy

15. The 2nd appellant held the majority interest, through three New Zealand companies, in Dragon Joy Ltd (Dragon Joy), which in turn held the majority shares in Global Food Holdings Ltd (GFHL). The 2nd appellant’s interests in the three New Zealand companies were held on trust for her by Graham Chin.

The UBNZ Group

16. UBNZ Trustee Ltd (UBTL) is a company registered in New Zealand. Ms May Wang was a director and the sole shareholder of UBTL. In May 2009, UBTL held 100% of the shares of UBNZ Assets Holdings Ltd (UBAH), which had agreed to acquire 22 dairy farms in New Zealand through UBNZ Funds Management Ltd (UBFM). Walter Shum was a director of UBAH and UBFM.

17. Jack Chen introduced Ms May Wang to the 1st appellant in 2008 and she had been a client of FKC since then.

The UBTL and 462 agreement

18. By an agreement dated 22 May 2009, 462 agreed to purchase Ms May Wang’s interest in the New Zealand companies, and thereby the dairy farms. The agreement consisted of two parts. By the first part, 462 agreed to pay NZD100 million to purchase 20% of the issued share capital of UBAH and 20% of the debt owed by UBAH to UBTL. The NZD100 million was to be paid by monies raised in the issue of convertible notes, with a maturity date of 10 years. By the second part, 462 agreed to pay NZD400 million for an option to purchase the remaining 80% of the issued share capital of UBAH. Accordingly, the total consideration was NZD500 million. The agreement constituted a Very Substantial Acquisition under the Listing Rules of the Stock Exchange of Hong Kong (the 1st VSA).

462: Circular/EGM

19. On 8 September 2009, a Circular was issued by 462 to its shareholders concerning the 1st VSA. On 2 October 2009, the acquisition of UBAH’s shares was approved in an EGM by the shareholders of 462.

462: Convertible Notes (CN-C)

20. On 4 December 2009, 462 entered into a Placing agreement with Sun Hung Kai Investment Services Ltd (SHKIS) to place convertible notes, CN-C, for subscription by investors in an aggregate principal amount of HKD951 million. 462 undertook that all subscription monies under the CN-C would be applied solely for the purpose of the acquisition and the general working capital of 462 and its subsidiaries.

21. Between December 2009 and September 2010, HKD842 million was raised under the CN-C.

22. In the period 21 December 2009 to 2 February 2010, HKD692.27 million (equivalent to NZD125.6 million) of the HKD842 million was remitted by SHKIS to Knight Coldicutt, a firm of solicitors in New Zealand acting as escrow trustee.

23. On and between 11 February 2010 and 15 February 2010, Knight Coldicutt remitted a total of NZD25,262,070.17 to UBTL. On 2 March 2010, HKD73,736,482.56, equivalent to NZD13,682,776.50, was remitted from UBTL to an ICBC account held by Goldmate (the First Goldmate Account). On the same day, HKD73.7 million was transferred from the First Goldmate Account to another ICBC account held by Goldmate (the Second Goldmate Account).

The HKD68.95 million

24. On 11 March 2010, Goldmate transferred HKD69 million from the Second Goldmate Account back to the First Goldmate Account. On the same day, Jack Chen issued a cheque for HKD68.95 million on the First Goldmate Account in favour of FKC’s Client Account.

25. An Official Receipt for the transfer was signed by Ms Flora Chan and a member of the staff of the Accounts Department. The money was described as “Costs and Disbursements on Account” and the client as Goldmate.

26. On 12 March 2010, a cheque for HKD68.95 million, signed by the 1st appellant, was drawn on FKC’s Client Account in favour of the 2nd appellant, issued by the 1st appellant. A payment voucher of that date, written by Ms Flora Tam, described the payment as having been made to the 2nd appellant as “C&D refund to client”.

…

The prosecution case

(i) The 1st appellant

28. Ms Flora Tam, the 1st appellant’s secretary, testified that the 1st appellant told her, on a day before 11 March 2010, that Jack Chen would deposit about USD10 million into FKC’s Client Account and that the money would be transferred out the following day. He told her it was to be transferred to Jack Chen’s wife, Betty, namely the 2nd appellant. She did not recall if she was told that before or after the money was deposited into the FKC’s Client Account. She said that it was possible that she had obtained the information in respect of the 2nd appellant’s bank account from Jack Chen’s personal assistant, Lulu.

29. On 11 March 2010, FKC’s Client Account received a deposit of $68,950,000, which she understood to be the USD10 million, the deposit of which the 1st appellant had forewarned her. As he had instructed her, she put down Goldmate as the name of the client on the Official Receipt. In cross-examination, she denied suggestions to the contrary.

30. In her experience, $68,950,000 was a large amount, rarely seen, for “Costs and Disbursements” for an Initial Public Offer, acquisition of company or any work handled by the 1st appellant. The usual range was around $1,000,000. She signed the Official Receipt, dated 11 March 2010, together with a member of staff of the Accounts Department. The money was described as “Costs and Disbursements on Account”. Invariably, she sought the 1st appellant’s instructions before giving instructions to the Accounts Department as to how to deal with any money credited into FKC’s Client Account.

31. Ms Rachel Fong Siu Lan, the accounts clerk of FKC, said that she prepared the Official Receipt for this money. She followed Ms Flora Tam’s instructions...

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