Hong Kong Smuggling Trial begins

[Robert Weissman <rob@essential.org>]

                            Tuesday  May 12  1998

                    Tobacco boss 'took
                    millions in bribes' 

                CHARLOTTE PARSONS 
                A tobacco firm chief gained more than $33 million
                in the form of bribes and a loan to ensure a
                particular distributor kept its supply of cigarettes, a
                court heard yesterday.

                Jerry Lui Kin-hong, 42, took a series of pay-offs
                from Giant Island, which his multinational employer
                supplied with large quantities of cigarettes
                earmarked for the mainland on which duty did not
                have to be paid, prosecutor John Reading said.

                Lui has denied conspiring to accept advantages.

                Mr Reading told the Court of First Instance that
                despite there being just a few distributors of
                duty-not-paid cigarettes, the Giant Island group
                enjoyed the lion's share of such supplies for many
                years.

                The court heard that Lui began working for Brown
                and Williamson Tobacco Corp, part of
                London-based multinational British-American
                Tobacco in August 1988.

                Two months later, Giant Island allegedly deposited
                US$250,000 (HK$1.9 million) into a bank account
                Lui opened in Guernsey. "A company does not give
                away this amount of money for no reason," Mr
                Reading said.

                "Perhaps it was a payment made in anticipation that
                one day the accused would be in a position to be
                able to give Giant Island some assistance in
                obtaining cigarettes from [his company]."

                When Lui rose to commercial director - responsible
                for allocating duty-not-paid cigarettes to
                distributors - his bank balance rose with him, the
                court heard.

                Over the years, millions of dollars flowed from
                Giant Island coffers into another bank account of
                Lui's in Luxembourg, Mr Reading said.

                "We say these payments were secret commissions
                or bribes," he said. On April 30, 1993, Lui quit his
                job and went to work for the Giant Island group.

                His new employers quickly gave him an unsecured
                loan of $10 million, the court heard.

                On April 20, 1994, Lui travelled from Hong Kong
                to the Philippines.

                Six days later, the Independent Commission
                Against Corruption went to his Red Hill Peninsula
                flat with a search warrant only to discover that he
                had left, the court was told.

                Lui was arrested in Boston and extradited to Hong
                Kong in May last year.

                The trial continues before Mr Justice Patrick Chan
                Siu-oi.


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