Metal firm chief held on fraud rap

Grace Cao

Tuesday, August 13, 2013

China Metal Recycling (0773) chairman Jacky Chun Chi-wai was held by police yesterday for alleged false accounting, sources said.
Police said that a 47-year-old man surnamed Chun was arrested yesterday afternoon for false accounting and had been detained for further inquiries. Sources confirmed that the person cited was Jacky Chun. Chun is the the fourth senior executive of China Metal Recycling to be taken in by police. Chun's wife Lai Wun-yin and Leung Chong-shun, both non-executive directors, plus chief financial officer and company secretary Kenneth Greg Lam Po-kei were arrested earlier by the Commercial Crime Bureau. Last July 29, the Securities and Futures Commission moved to liquidate the firm for overstating its financial position . China Metal Recycling has sued Chun, his wife and 10 metal recycling firms for fraudulent breach of trust and causing the firm huge losses. The firm is also seeking payment of debts, losses and damages or other relief relating to false or misleading information on the firm's financial position, the deployment of a scheme with the intention to deceive, dividends paid out on inflated profits, and purported sales and payments for fictitious transactions. It was reported that the firm took out a huge loan and land, along with warehouse receipts, were used as fake collateral. The Guangzhou-based firm's shares have been suspended since January 28 after US shortseller Glaucus Research made allegations against it. Atlantis Investment Management chairwoman Liu Yang, Norway's central bank and state-owned enterprise China Energy Conservation and Environmental Protection Group are all shareholders of China Metal Recycling.