Hello Hong Kong

May 2013, Northumbria

It is 30 years since the Carrian Group collapsed, following a sharp drop in property prices in Hong Kong. The police discovered accounting fraud had been committed during the purchase and sale of the company’s largest acquisition – the Gammon House, bought for HK$1 billion and sold for HK$1.6 billion. A Bumiputra Malaysia Finance Limited auditor was murdered during the investigation (BMFL had been the biggest lender to the Carrian Group). The auditor had been commissioned to inspect BMFL books to determine if the bank had improperly approved loans.

This was later confirmed and corruption offences were alleged against several BMFL executives. After more than a decade of international chasing and re-trials, only a handful of bankers received significant sentences – between 3 and 10 years. The former BMFL chairman, however, was only sentenced to one year in prison, after pleading guilty to conspiracy to defraud. In what can only be described as a mind-boggling decision, the High Court Justice Dennis Baker QC declared, in 1987, that the mastermind and founder of Carrian, George Tan, who had been a Singaporean illegal immigrant in Hong Kong, had no case to answer.

What I would be most interested in finding out is, what has taken place in Hong Kong and the whole Asian region over the last 30 years? If another Tan were to get busy at work in the region today, what would their prospects of getting caught be? And what about preventive measures – has any regulation been put in place to make sure that no loopholes exist anymore that can allow white-collar crime to plague institutions at such a scale?

The Hong Kong Independent Commission Against Corruption’s report on Carrian is available here.

An analysis of the Carrian case is available here.