A former executive director of a Hong Kong-listed dairy company fell from grace yesterday, as he was jailed for seven years and nine months for conspiring in an “evil” bid to defraud his company and the stock exchange.
Chen Keen, also known as Tupa’i Jack Chen, concealed his connection with co-defendant May Wang, when he tried to talk the predecessor of his Natural Dairy (N.Z.) Holdings into buying 22 farms in New Zealand in 2009.
The mainlander – said to be a leading figure in the Chinese community in New Zealand after he moved there – was found guilty earlier by a High Court jury of two counts of conspiracy to defraud and one of laundering more than HK$85 million.
Wang, also known as May Hao, was jailed for eight years and three months, while a third defendant, Eric Yee, who managed the company’s accounts, was sentenced to five years.
They were found guilty of the same conspiracy charge.
Sentencing Chen and Wang on Monday, Madam Justice Anthea Pang Po-kam slammed the pair for taking advantage of the company’s listed status and the city’s regulated stock market to raise funds for their criminal plot.
“Such a criminal act is one to be deterred,” she said, adding that what the pair did had destroyed the public’s confidence in the local stock market.
The court previously heard that Chen concealed his business ties with Wang from the city’s stock exchange and shareholders of Natural Dairy (NZ) Holdings, formerly China Jin Hui Mining Corporation, when he attempted to acquire the farms from New Zealand company Crafarms Group between May 7, 2009 and July 19, 2010.
The farms were purchased by Wang, a mainlander who migrated to New Zealand, for NZ$259 million (HK$1.4 billion) before being resold to China Jin Hui Mining Corporation at Chen’s suggestion for NZ$500 million.
The pair also failed to inform the stock market watchdog and shareholders about the actual value of Crafarms, which was described as a “rubbish company” by one of the witnesses.
Despite the stock exchange’s attempt to seek clarification from the pair over their relationship, the judge noted, they maintained that they were not connected.
Pang called their failure to inform shareholders of the farms’ actual value “a particularly evil act”, adding that it deprived shareholders the chance to make an informed decision.
The judge said she refused to accept the pair’s mitigation that no actual loss had been incurred, as they put shareholders’ interest at risk.
But she reduced Chen’s sentence by six months from the original eight years and three months, after learning that Chen had been a leading figure in the Chinese community since he moved to New Zealand.
The court also took into account the contributions and donations Chen had made over the years to the mainland, New Zealand and Samoa.