ZIMBABWE – A Chinese investor reportedly lost US$70 million and industrial equipment to his trusted lieutenant whom he sent to establish seven companies in Zimbabwe.
Liu Cheng Hsiao (55) pleaded not guilty to two counts of fraud and theft of trust property when he appeared before Harare magistrate Mr Donald Ndirowei. Mr Ndirowei remanded Hsiao to November 1 on US$1 000 bail.
Hsiao was ordered to surrender his travel documents. He is also required to report to the nearest police station twice a week and not to interfere with the seven companies.
Hsiao was also ordered to surrender title deeds to the companies. Prosecutor Mr Tungamirai Chakurira alleges that the complainant, whose name was not given, is the owner of Fok Hing Industries in Hong Kong.
The company allegedly employed Hsiao in Hong Kong after his company in Taiwan had collapsed.
According to the State, Hsiao was 2002 seconded by the complainant to come to Zimbabwe and manage the affairs of Fok Hing Industries’ seven subsidiary companies.
According to the indictment, Hsiao was supposed to register the subsidiary companies with the registrar of companies and the Zimbabwe Investment Authority.
It is alleged that the instruction from the complainant was that the directors were to be Mr Wong Shu Wai and Mrs Tsoi Yu Yu who were also to be the only shareholders.
Hsiao fraudulently included himself and his wife Luan Shen as directors before allocating themselves fifty percent shareholding. Hsiao allegedly opened three bank accounts with CBZ, African Banking Corporation and Metropolitan Bank for the companies and made himself the signatory of the accounts.
Hsiao allegedly advised the complainant that the companies had been registered but did not disclose the shareholding structures of the seven companies, it is alleged.
He allegedly prejudiced the complainant of his shares in the seven companies and nothing was recovered.
Between 2002 and March 2012, Hsiao would allegedly ask for money from the complainant to run the business and at times directed the complainant to pay service providers he would have indicated.
During the period the complainant allegedly transferred US$70 million to the given bank accounts and other service providers at the behest of Hsiao.
In 2011, the complainant called for financial returns but nothing came up, the court heard. In October 2012, the complainant came to Zimbabwe and discovered there was non accountability of the amount he injected into the companies.
Hsiao allegedly failed to account or accounted incorrectly for the property that is cash and industrial equipment he received.