HK legislator in fraud charges

Chim Pui-chung, known as a defender of dubious market practices, is on pounds 3.4m bail accused of forgery, reports Stephen Vines in Hong Kong

When he was elected to the Hong Kong legislature as the representative of stockbrokers and other financial sector employees, Chim Pui-chung promptly rushed out to buy a gold Rolls-Royce.

Already well-known as a stock market wheeler-dealer Mr Chim became known as a defender of indefensible market practices. Yesterday he was set for another defence as he found himself in court facing three forgery charges and was only released on bail after forwarding HK$40m (pounds 3.4m) in cash and sureties.

In typically robust style, Mr Chim emerged from court to say he saw no reason why he needed to resign from the legislature. He has yet to enter a plea about the charges, which arise from extensive investigations by the watchdog Securities and Futures Commission and the Commercial Crimes Bureau.

The charges involve the creation and use of false instruments to effect the purported transfer of shares from two companies allegedly controlled by Mr Chim, the subsequent transfer of shares from the bogus purchasers to a company and a conspiracy charge of defrauding the SFC to avoid compliance with the takeover code.

Mr Chim often believes that attack is the best form of defence. On Tuesday he was in the High Court with a libel writ seeking a breathtaking HK$50bn (pounds 4.2bn) in damages from five past and present SFC directors.

The stock market watchdog had earlier sought the winding up of Mandarin Resources, a company controlled by Mr Chim, on grounds that he allegedly breached his fiduciary duties, misused company assets, violated regulations and "unfairly prejudiced, if not defrauded" minority shareholders.

The accusations in the Mandarin case relate to alleged fraudulent property dealings involving Mr Chim's Lucky Man Properties, which are also the subject of the police fraud action.

When Mr Chim is not the centre of controversy for his own activities - recently including a long liquid lunch at the legislature which, according to some reports, left him zig-zagging out of the council chamber - he is busy defending others accused of wrongdoing.

Under Hong Kong's bizarre election system, certain occupational groups, such as stockbrokers, are entitled to elect a representative to the legislature.

In the last election Mr Chim campaigned on a platform of granting an amnesty to "rat traders", that is brokers who unlawfully benefit from the delayed execution of customers' orders so that they can make a side profit.

It says something about the state of morality among the brokers that this platform proved to be a vote-winner.

When insurance company employees, who are also members of his constituency, failed to vote for him when he was first elected, Mr Chim promptly declared that he would have no hesitation in not representing their interests.

When a government land development affected one of his Lucky Man properties and he failed to obtain the kind of compensation he believed was due, Mr Chim promptly set about making the compensation issue a focus of his legislative activities, taking precedence over other issues.

Mr Chim is a very wealthy man. When he was first elected to the legislature he boasted that he owned properties in Hong Kong worth HK$600m-HK700m, alongside some HK$200m invested in Chinese properties, a total of some pounds 76m.

Some of this wealth was acquired by acting as a stockbroker for George Tan, the head of the collapsed Carrian group who is involved in Hong Kong's longest-running trial on criminal charges arising from the collapse.

Mr Chim has added a dash of considerable colour to the generally grey world of Hong Kong politics and stockbroking; his removal from the scene would be a big blow to the colony's cartoonists and talk show hosts.

However, while free on bail Mr Chim is unlikely to suddenly take the vow of silence.