Former CY Leung Adviser Jailed For Four Years

A former adviser to the former chief executive CY Leung has been sentenced to four years in jail, for defrauding the Securities and Futures Commission (SFC) and cheating a company out of tens of millions of dollars.

The offences relate to Barry Cheung's tenure as chairman of the Hong Kong Mercantile Exchange between May 2012 and its collapse in May 2013.

The District Court found Cheung guilty last week of conspiring with the firm's chief financial officer, Jacky Choi, to defraud the SFC and to mislead the watchdog into allowing it to retain its licence – by hiding the exchange's true financial position.

Cheung, 61, was also convicted of a separate charge of cheating a company called Sinomax Finance out of HK$30 million, with the money going to a firm owned by him.

In sentencing on Thursday, judge Amanda Woodcock said the case was "not a fraud to line one's pocket", and Cheung didn't personally benefit.

She also said no one suffered any losses.

But the judge said Cheung had the ambition and desire for the exchange to succeed, and "a touch of arrogance" to think that he could get away with his dishonest acts.

She said although it was unclear if the case harmed Hong Kong's reputation as an international financial centre, it's important to protect the integrity and reputation of the SFC.

Cheung has also been barred from serving as a company director for five years.

The police welcomed the sentencing and said it could help deter similar cases in future.

Chief inspector Charles Fung of the Commercial Crime Bureau also spoke about the challenges they faced in their years-long investigation.

"We needed to analyse and obtain a lot of documentary evidence, and also we needed to analyse the fund flows... and all these increased the difficulties and complexities of our investigation," he said.

Choi, who pleaded guilty and acted as a prosecution witness, was on Thursday sentenced to one year in jail.

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