High-Profile Businesswoman Jailed For Fraud

Forbes

The first chairwoman of Hong Kong's General Chamber of Commerce will be spending the next three and half years in prison. Lily Chiang Lai-lei was sentenced on Wednesday for masterminding a fraud that involved 3.7 million Hong Kong dollars ($475,000) worth of company shares.

District Court Judge Albert Wong Sung-hau said Chiang's crime had damaged Hong Kong's reputation and integrity as an international financial center, when handing down the sentence for fraud, conspiracy to defraud and authorizing a prospectus that included an untrue statement. Wong had reduced her sentence in consideration of her contribution to the community and the fact she has four young children.

Two of Chiang's co-defendants, Tahir Hussain Shah, 46, former executive director of Pacific Challenge Holdings and Pau Kwok-ping, 55, former chief executive of Eco-Tek Holdings, were sentenced to two years and 19 months in prison, respectively.

Chiang, 50, was found to have orchestrated a scam in which she had concealed her options or shares in two listed companies by telling her staff to hold the assets on her behalf. During legal proceedings that lasted for nearly four years, Chiang's defence had argued that the options were rewards for senior officers at the two companies, even though the staff were found to include her driver and personal assistant amongst others.

Chiang said earlier in an interview with the South China Morning Post she was innocent and planned to appeal. "I am sure I would have won this case if the trial had been held in the High Court with a jury," she said. "The jurors would naturally have asked how come a successful businesswoman would make such an effort to cheat over just a few million dollars. This did not make sense."

She denied that she had benefited from the shares she had her employees holding for her. "I genuinely wanted to reward my staff," Chiang said. "The prosecution kept saying it doesn't make sense to give away so many stock options to junior staff. But I asked: "Why not?"

Chiang is from a prominent business family in Hong Kong. Her father, Chiang Chen, is a renowned “rags to riches” entrepreneur and philanthropist. Coming from China’s Shandong Province in 1949, he built his empire of injection molding machines out of 200 Hong Kong dollars. He founded Chen Hsong Holdings in 1958.

Graduated from University of Southern California in the United States, Chiang helped her father's company to complete automation of its warehousing and administrative system when she returned to Hong Kong. In 1999, she was named one of Hong Kong's Ten Outstanding Young People.

Chiang's husband, Gino Yu, is an associate professor at Polytechnic University. Her second eldest sister Ann Chiang Lai-wan is the vice chairwoman of the Democratic Alliance for the Betterment and Progress of Hong Kong. Agnes Chiang Lai-ping, her third eldest sister, was a singer and actress in the 1980s.

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