Ex-HSBC Banker Gets 20 Months Prison for Taking Bribe (Update2)

c.2009 Bloomberg News

(Adds anti-graft agency comment in third paragraph.)

Dec. 23 (Bloomberg) -- Former HSBC Holdings Plc executive Chen Ching-hsiao was sentenced to 20 months in prison by a Hong Kong court for taking a bribe from a Taiwanese client seeking credit facilities.

"As a senior manager he damaged the reputation of the bank but he was willing to face up to his errors," said Hong Kong District Court Judge Stanley Chan today. Chen, 46, faced a maximum sentence of three years.

Chen pleaded guilty on Nov. 13 to charges that he accepted a $60,000 bribe from the owner of Profit Reach, which made shoes for New Balance and Timberland, in June 2007 in return for recommending or approving two credit facilities. HSBC referred the case to Hong Kong's Independent Commission Against Corruption, the anti-graft agency said in a statement today.

Chen was a senior vice-president of HSBC's commercial banking department in Hong Kong responsible for dealing with Taiwanese entrepreneurs doing business in China, the ICAC said.

He recommended facilities of over $10 million for Profit Reach and another sports shoe maker owned by the same businessmen. The two companies owed HSBC HK$60 million ($7.7 million) in default payments as of Nov. 26.

Chen's lawyer, Barry Chin, said Nov. 13 his client pleaded guilty to avoid the embarrassment of a lengthy trial.

The judge said today he "believes the defendant is remorseful." Chen sat with his head bowed throughout the sentencing and did not speak.

HSBC spokesman David Hall declined to comment on today's sentence.

The case is Department of Justice v. Chen Ching Hsiao, DCCC 1184/2009, Hong Kong District Court.

For Related News and Information: Stories on crime in Hong Kong: TNI HK CRIME Top Legal Stories: TLAW HSBC's top management: 5 HK MGMT Hong Kong statistics: ECST HK