The court heard that more than HK$3 million in cash was seized by police at a flat jointly rented by Leung and Chan at Grand Plaza Apartments in Kornhill Road in August 2004.

Investor Ng Suet-hung, 39, told the court the company only accepted cash. She invested HK$66,000 after being introduced by a friend and attending promotions in June 2004 that promised high returns. Ms Ng, a housewife who has lived in Hong Kong since 2000, said people 'sang and celebrated' at the meeting.

'A lot of people had made money. Some people went up saying a certain amount of money had been invested and now a certain amount had been made,' she said.

She added that some claimed investments of 'a few hundred thousand dollars' could make profits of up to HK$80,000 to HK$100,000.

Each time clients invested more or introduced a new customer, they were told they could go to the next level of the plan and would eventually qualify for large bonuses.

The company held gatherings at five-star hotels where investors were presented with giant cheques, prosecutor Michael Delaney said. Some clients were given sheep placenta extract pills, which are used for skincare, and other samples of what they were investing in.

But Mr Delaney said a treasury accountant decided there was no 'viable business' behind the company.

He said the accountant showed the firm's plans would need a return of 200 to 362 per cent to meet the returns clients had been promised.

Mr Delaney said: 'The number of investors must increase at a constant rate to satisfy the ever increasing demand for the bonuses.

'However, the amounts of money required soon become astronomical and wholly unrealistic.

'If the number of investors declines or remains constant, then Perfect Life would very quickly be unable to meet the bonus payments.'

The trial continues before Judge Susana D'Almada Remedios today.