Zhou Hong, former CEO of Bandung Holdings, was sentenced to ten years and eight months in prison for fraud

Zhou Hong, the former CEO of Bandung Holdings Group, a Hong Kong-listed company, was suspected of using his position to facilitate fictitious transactions and obtain huge amounts of company funds to purchase luxury watches for personal use. He was found guilty of fraud and was sentenced to ten years and eight months in prison at the Hong Kong High Court on the 14th. The court also ordered him to pay compensation of HK$51.57 million to the company and banned him from serving as a director of the company for fifteen years.

The case shows that while Zhou Hong served as the CEO of Wanlong Holdings and the authorized signatory of its subsidiaries, from 2020 to 2021, he premeditatedly fabricated the purchase of beauty products and issued 16 company checks to three suppliers, totaling HK$60.17 million. The relevant funds were not used to purchase goods. Instead, they purchased 11 expensive watches through an intermediary and kept them for themselves. The company did not receive any goods throughout the process and suffered heavy economic losses.

Judge Guo Qian of the High Court pointed out during the hearing that this case was a typical case of self-defense and self-stealing. As a senior executive of a listed company, the defendant violated the trustee's fiduciary duty, and the crime cycle was long and well-premeditated. The valuable watches involved in the case have not been recovered so far, which not only caused the company's actual losses, but also damaged the reputation of the listed company, dragged down the stock price, and weakened the market's confidence in corporate governance. The penalty should be increased according to the law. The court set a starting point of eleven years in prison for sentencing.

The court considered that Zhou Hong was a first-time offender, had no previous criminal record, and that many relatives, friends and industry insiders had issued letters of pleading, recognizing that he had good character in the past and was self-made. The court reduced the sentence as appropriate and ultimately sentenced him to ten years and eight months in prison. After deducting the company's previous repayments, the actual loss in this case was HK$51.57 million. The court ordered Zhou Hong to compensate in full. At the same time, he was banned from serving as a company director and related management positions for fifteen years.

Reporter: Dai Xiaolu