A former listed-company chief executive has been sentenced to 10 years and eight months in prison for using company funds to acquire 11 luxury watches, after a purported cosmetics-trading arrangement channelled HK$60.17 million to three suppliers.
The High Court also ordered him to compensate the company, while barring him from serving as a director for 15 years. The case concerned conduct between 1 January 2020 and 31 March 2021, when he was the company’s chief executive and executive director, as well as a director and authorised signatory of a subsidiary.
According to the prosecution case and the sentencing findings, the subsidiary issued 16 cheques for supposed beauty-product purchases. The money was instead used through an intermediary to buy watches for the executive’s personal possession. Police found that the three suppliers dealt in watches, while the company received none of the products recorded in its accounts.
The watches had not been recovered by the time of sentencing and their whereabouts remained unknown. Judge Anthony KWOK Kai-on said the executive later fabricated accounting records, and described the conduct as premeditated and systematic over about 15 months.
The court treated the breach of trust owed to the company and its shareholders, the damage to the listed company’s reputation and share price, and the wider effect on confidence in listed companies and financial markets as aggravating factors. The judge set an 11-year starting point, reducing it by four months because the defendant was a first offender with previous good character.
The HK$51.57 million compensation order reflected the company’s stated loss after HK$8.59 million was transferred back. The compensation is to be deducted from the HK$10 million previously paid as bail, and the 15-year disqualification prevents the former executive from acting as a company director.
The former finance director, who had faced the same fraud charge, was acquitted by the jury and released.