The defendant was charged in an ICAC case with money laundering of RMB 402,861,903.43.
After a 24-day trial, the Court (DDCJ C H Li) acquitted the defendant, holding that “there is no admissible evidence to substantiate the claim” (§63).
The Prosecution alleged that Wu, who held the most senior position of a state-owned tobacco enterprise China Tobacco Chuanyu Industrial Company Limited (“CTCI”) as its General Manager arranged the defendant to hold shares on his behalf in a start-up company called SENM, which manufactured lithium battery separators and had potential for significant growth. The shares were offered by the Lee brothers, who were a materials supplier to CTCI. The shares were subsequently sold for RMB 402,861,903.43 and the funds received by the defendant into his Hong Kong bank account (§§4-12, 22).
Three Prosecution witnesses, the Lee brothers (PW4, PW5) and the defendant’s friend (PW6) gave evidence under immunity (§§20, 27, and 32).
Three witnesses gave evidence remotely in Chinese Mainland. These were one of the Lee brothers (§20), the present second ranking Senior Manager of China Tobacco Sichuan (§14), and the former head of the Import and Export Department of CTCI (§18).
The Court held that there is no admissible evidence to make out the predicate offence, and in any event was unable to rule out that the defendant was making a genuine investment into the shares and realized it and got back the cash he invested (§88). As the case unfolded, several key factors were revealed in evidence.
First, the Court noted that Wu was a crucial witness, but he did not give evidence (§61). What remained was the evidence of the Lee brothers, in particular their beliefs (§62).
Second, the Court held that had it been a bribe, it would be quite natural for Wu to ask the Lee brothers for the shares for free or at a nominal price, but what transpired was that a fairly substantial amount was paid by the defendant or Wu in obtaining the shares (§73).
Third, even if the Court were to accept the statement made by the Lee brothers, the best that could be said was that the Lee brothers thought that they were doing Wu a favor by acceding to his request of buying their shares and the fact that they believed the defendant was the representative of Wu to hold the shares on Wu’s behalf (§64). The fallacy was that “everything was based on their beliefs and nothing more, there isn’t a single piece of admissible evidence to support their beliefs” (§65).
Overall, the Court found that none of the criticisms made by the prosecution would undermine or contradict the evidence of the defendant that it was his own genuine investment (§76).
The verdict has been reported in the news:
Wayne Walsh SC leading Lawrence Hui and Fergus Tam, instructed by Zhong Lun Law Firm LLP, acted for the defendant.
For Wayne’s full profile, see here.
For Fergus’ full profile, see here.
The reasons for verdict of DDCJ CH Li [2026] HKDC 1466 dated 11 August 2026 can be found here.
