XN000022-1991-02-05 — Page 3

TUESDAY, FEBRUARY 5, 1991

2

BUSINESSMAN JAILED FOR TAX EVASION

A 51-YEAR-OLD BUSINESSMAN WAS SENTENCED TO 12 MONTHS IMPRISONMENT AND FINED A TOTAL OF $3,347,584 IN THE WANCHAI DISTRICT COURT TODAY AFTER HE WAS FOUND GUILTY OF SIX COUNTS OF TAX EVASION- RELATED CHARGES ON MONDAY (YESTERDAY).

THE FIRE WAS EQUIVALENT TO 200 PERCENT OF THE TOTAL TAX BVADED.

THE DEFENDANT, KWOK HING-FOR KINGSFORD, THE SOLE PROPRIETOR OF FEDERAL CHEMICAL CO,

WAS CHARGED WITH THREE COUNTS OF SUBMITTING INACCURATE TAX RETURNS CONTRARY TO SECTION 82(1)(D) OF THE INLAND REVENUE ORDINANCE AND THREE COUNTS OF CREATING FALSE PURCHASES IN THE COMPANY'S BOOKS AND CONSEQUENTLY, TO OVERSTATE PURCHASES IN THB TAX RETURNS, CONTRARY TO SECTION 82(1)(G) OF THE ORDINANCE.

HAD

DELIVERING HIS JUDGEMENT, DEPUTY JUDGE DAVIES SAID THE EVIDENCE WAS OVERWHELMINGLY IN SUPPORT OF THE CONVICTION. THE DEFENDANT DELIBERATELY FALSIFIED THE PROFITS TAX RETURNS IN ORDER TO SAVE THE PAYMENT OF LARGE AMOUNT OF MONEY TO PUBLIC PURSE.

HB SENTENCED THE DEFENDANT TO 12 MONTHS IMPRISONMENT FOR CHARGE, TO BE EXECUTED CONCURRENTLY.

BACH

THE

THE OFFENCES INVOLVED THE SUBMISSIONS BY THE DEFENDANT TO INLAND REVENUE DEPARTMENT (IRD) OF PROFITS TAX RETURNS FOR THE TAX ASSESSMENT YEARS 1985/86 TO 1987/88 IN WHICH ASSESSABLE PROFITS HAD BEEN UNDERSTATED, AND AS A RESULT, PROFITS TAX EVADED.

SENIOR CROWN COUNSEL, MR MICHAEL BLANCHFLOWER, WHO REPRESENTED THE CROWN, TOLD THE COURT THAT THE DEFENDANT UNDERSTATED SALES OF $7.3 MILLION AND OVERSTATED PURCHASES $2.5 MILLION IN THE TAX RETURNS AND CONSEQUENTLY UNDERSTATED PROFITS OF $9,795,100 WHICH WAS 94 PERCENT OF THE FULL PROFITS AND EVADED TAX OF $1,673,792.

THIS IS THE LARGEST CASE IN RECENT YEARS IN TERMS OF THE QUANTUM OF UNDERSTATED PROFITS AND EVADED TAX.

THE COURT WAS TOLD THAT IN SEPTEMBER 1988, THE IRD INVESTIGATED AND SEARCHED THE DEFENDANT'S BUSINESS PREMISES AT CHAI WAN KOK STREET, TSUEN WAN .

DURING THE COURSE OF INVESTIGATION, THE DEFENDANT CLOSED THE BUSINESS AND LEFT FOR CANADA WITHOUT PRIOR NOTICE TO THE DEPARTMENT. HE LATER INFORMED THE IRD THAT HE HAD NO INTENTION OF RETURNING то HONG KONG. THE IRD THEN INITIATED EXTRADITION ACTIONS AGAINST HIM.

THE DEFENDANT WAS ARRESTED ON APRIL 28 LAST YEAR AFTER HE HAD SLIPPED INTO HONG KONG. HE WAS CHARGED AND APPEARED IN THE CENTRAL MAGISTRACY ON APRIL 30, LAST YEAR.

25.

THE CASE WAS LATER TRANSFERRED TO WAN CHAI DISTRICT COURT AND WAS HEARD BEFORE DEPUTY JUDGE DAVIES FROM JANUARY 10 TO JANUARY THE DEFENDANT PLEADED NOT GUILTY TO ALL THE CHARGES.

/AFTER THE