Five men and three women, including a director and three former senior staff of two listed companies, were arrested yesterday for defrauding shareholders and banks for a total of HK$3.55 billion.

Officers from the Commercial Crime Bureau seized documents from a 11th floor unit in Block C of the Hong Kong Industrial Centre on Castle Peak Road, where EganaGoldpfeil is located.

In 2007, a number of senior staff of the two listed companies allegedly falsified accounting and transaction records and subsequently obtained loans of a total of HK$1 billion from shareholders and 18 local and foreign banks.

The trading receivables and profits from the bogus transactions involved a total of HK$2.55 billion which was subsequently written off.

After extensive investigations, police officers raided 13 locations and made the arrests yesterday.

Luxury goods maker EganaGoldpfeil suspended trading on the Stock Exchange on September 12, 2006.

The company issued a notice on October 2, citing possible change in shareholdings of the company.

The notice also announced the postponement of a board meeting and the publication of final results for the year ended May 31, 2007.

The company and Lifestyle International issued a joint statement last week that they had not signed any agreement to further extend the maturity date of a HK$300 million bridging loan, but the discussion for the extension is ongoing.

EganaGoldpfeil's executive director David Wong appeared in court last July for fraud charges.

Wong denied any wrongdoing and resigned in August.

(HK Edition 06/13/2008 page1)