Wayne Walsh SC leading Fergus Tam, instructed by Haldanes, acted for the appellants in Secretary for Justice v Shin Dong Ki & Ors [2023] HKCA 1021. The Court of Appeal granted leave to appeal on the appellants’ renewed application for leave to appeal on an additional ground in relation to the appellants’ application to discharge a restraint order.
The 1st appellant was convicted by the Seoul Central District Court of, inter alia, conspiracy to commit tax evasion. It was found that, upon the instructions of Mr. Lee Jae Hyun, the 1st appellant and two others had caused dividends in the sum of US$10 million to be paid from CJ International Asia Limited to the 7th appellant. Further, it was found that the 1st appellant and Mr. Lee Jae Hyun conspired to use the 7th appellant to transfer the sum to foreign countries to purchase art works, making it difficult for the Korean tax authority to track and reveal that the sum was beneficially owned by Mr. Lee Jae Hyun.
On 13 November 2019, the Secretary for Justice obtained a restraint order against the appellants.
On 14 July 2022, J Chan J varied the restraint order, reducing the amount under restraint to approximately HK$77.5 million.
On 20 January 2023, J Chan J granted leave to appeal on two grounds of appeal, namely:-
Ground 3, i.e. whether he erred in finding there is evidence that the 1st appellant benefited from the alleged money laundering offence; and
Ground 4, i.e. whether he erred in finding that the value of the 1st appellant’s benefit is not the amount of tax evaded by Lee but the money transacted.
On 3 February 2023, the appellants filed a renewed application for leave to appeal, arguing in relation to Ground 2 that (i) the money laundering offence is a “parasitic” offence predicated on the commission of another offence which yielded proceeds; (ii) the US$10 million deposited to the 7th appellant’s account is clean money which was not paid or received in the nature of a reward. Therefore, it was wrong for J Chan J to hold that it could not be said that the 1st appellant could not have been convicted of money laundering.
On 31 August 2023, the Court of Appeal (Poon CJHC and Kwan VP) granted leave to appeal on Ground 2 ([2023] HKCA 1021).
The judgments of J Chan J ([2022] HKCFI 929 and [2023] HKCFI 122) are not open to public. The judgment of the Court of Appeal can be found here.