Bribery and Corruption OffencesConfiscation Order

Corruption and Bribery Offences / Organised and Serious Crimes

Confiscation order

On 11 May 2023, the High Court of Hong Kong in HKSAR v Ha But Yee [2023] HKCFI 1208, held that a confiscation order be made under the Organised and Serious Crimes Ordinance (Cap 455) (OSCO) in the sum of HK$63,000,000 being the value of the realizable property of the be granted against Mr. Ha But Yee (Second Defendant).

Second Defendant was the second defendant in a re-trial commenced on 22 January 2018. At trial, Second Defendant pleaded guilty on a re-amended indictment to one count of offering an advantage to an agent, under sections 9(1)(a) and 9(2)(a) of the Prevention of Bribery Ordinance (Cap. 201) (“the POBO”).

Particulars of offence:

Second Defendant, between the 16th day of January 2007 and 7th day of May 2008, in Hong Kong, without lawful authority or reasonable excuse, offered advantages, namely, gifts, loans, fees, rewards or commissions consisting of a total amount of $6,391,758 Hong Kong currency to an agent, namely MA Sin-chi (First Defendant), being an agent of Deutsche Bank Aktiengesellschaft and Deutsche Securities Asia Limited, as inducements to or rewards for or otherwise on account of the said First Defendant or having done acts in relation to his principals’ affairs or business, including giving information to Second Defendant and rendering assistance to Second Defendant and his associates in the trading of those derivative warrants (DBWs).

It was the prosecution case, and accepted by both the first defendant and the second defendant, the Ha family made a total net profit of HK$203,689,156.68 through trading of DBWs during the relevant period, and First Defendant received a total of HK$6,391,758 as a reward for information and assisting Second Defendant and his associates to do so.

Legal Principles

The Secretary for Justice asked the High Court to certify the defendant’s proceeds of crime and to make a confiscation order in the sum of HK$63,000,000, being the value of Second Defendant’s realisable assets.

The confiscation order is made under section 8 of OSCO. Pursuant to section 8 of OSCO, the court must satisfied on the balance of probabilities of the following:

The person has benefitted from a specified offence; and if so,
That his/her proceeds of that specified offence are in total at least HK$100,000; and if so,
Determine the amount to be recovered under section 11 of OSCO.

Under section 2(6) of OSCO, a person’s proceeds of crime is defined as the aggregate value of:

Any payments or rewards received by him at any time … in connection with the commission of that offence;
Any property derived or realised, directly or indirectly, by him from any of the payments or rewards; and
Any pecuniary advantage obtained in connection with the commission of that offence.

Submissions

The Secretary for Justice submitted that the second defendant’s benefits was HK$125,664,254.30.

Second Defendant’s counsel submitted that the amount of benefit should be a much smaller amount. It was submitted that the Court should determine the quantum of benefits in a three-stage approach (illegality, causation and quantification): (1) whether Second Defendant had benefitted from the offence; (2) whether Second Defendant received payments / trading profits in connection with the commission of the relevant offence; and (3) quantify that profit in accordance with section 11 of OSCO. In this case, the provision of information by First Defendant to Second Defendant was made via 356 phone calls. Second Defendant’s counsel asked the Court to look at each of the calls to satisfy itself that some form of offending took place. An expert report was submitted by Second Defendant which indicated that 34 out of 356 phone calls that contained information which ‘may assist’ Second Defendant warrant trading, which were followed by a trade and a gain.

The Secretary for Justice in support of its application for the confiscation order submitted that the Court should not limit itself to the 34 calls as relied upon by Second Defendant’s counsel, as the assistance was provided over a period of time.

Held

In determining the quantum, the Court considered, among others, Second Defendant’s trading pattern, number of accounts involved, trading strategy and the relationship between Second Defendant and First Defendant.

The Court held that the phone calls between Second Defendant and First Defendant represented a continuous course of criminal conduct for both to obtain information from First Defendant and to secure assistance from First Defendant. The payments made to First Defendant was over a period of time, seeking to pre-emptively secure that information and assistance on an ongoing basis or as a reward for having actually received information and assistance. This falls within the wordings of section 2(6) of OSCO which relates to the proceeds of offence. It was proper for the Court to order confiscation order of the whole of the realisable property of the Second Defendant which has been agreed by the parties.

It was held that Second Defendant shall pay the sum of HK$63,000,000 on or before 11 November 2023, failing which the Second Defendant is to serve a term of imprisonment of 10 years in default.

After Thoughts

This case provides further clarity in determining the quantum to be recovered under confiscation order under the Organised and Serious Crimes Ordinance. It also highlights the importance of reviewing all the documents in detail signifying one’s agreements.

If you wish to find out more about this article or how we can help, please contact: