Jailing of top Hong Kong officials sends the right signal on corruption

20 March 2017 1:21pm

22 February 2017. By Toh Han Shih. 

A disturbing pattern of investigation or punishment of current and former leaders of Hong Kong for corruption is emerging. Since Hong Kong's handover to China in 1997, the Special Administrative Region has had three chief executives, two of whom have been investigated for accepting money and favors from business.

Hong Kong's Independent Commission Against Corruption has been investigating the city's current chief executive, Leung Chun-ying, since 2014, based on media reports that Australian engineering firm UGL paid him $6.4 million. So far, no charges have been laid against Leung, who has denied any wrongdoing. Leung recently announced that he would not seek a second term as chief executive when his first term expires later this year.

Today, Hong Kong judge Andrew Chan Hing-wai sentenced former Hong Kong Chief Executive Donald Tsang Yam-kuen to 20 months in jail for misconduct in public office, making him the territory's first chief executive and most senior official to be punished for a crime. On Feb. 17, nine jurors, by a verdict of eight to one, found that Tsang had deliberately concealed negotiations over renting a penthouse in Shenzhen, on the Chinese mainland, belonging to Hong Kong property company East Pacific Holdings. A Hong Kong businessman, Bill Wong Cho-bau, is a director of East Pacific. Around the time of the negotiations, Tsang approved three applications to his government from Hong Kong radio station Wave Media, of which Wong was a shareholder.

Tsang faces a retrial on a charge of bribery on which the jurors could not reach a verdict last week, tentatively scheduled for September. According to the bribery charge, Tsang accepted a free redecoration of the penthouse costing HK$3.35 million, all paid for by a company controlled by Wong.

In December 2014, Rafael Hui Si-yan, a former Hong Kong chief secretary, was jailed for seven-and-a-half years for accepting bribes and favors from Sun Hung Kai Properties, Hong Kong's biggest property developer, and some of its former executives. Several executives of the Hong Kong-listed firm, including its former co-chairman, Thomas Kwok Ping-kwong, were sentenced to jail for their roles in the case.

Hui was chief secretary, Hong Kong's second most senior official, from June 2005 to June 2007, when Tsang was chief executive. The jailing of the two most senior leaders in a Hong Kong administration for corruption is a cause for concern, even though their cases are separate.

The sentencing of Tsang and Hui highlights the risks of collusion between property companies and senior officials in Hong Kong, where property prices are sky-high, the government controls land sales, and the territory's real estate market operates under the overweening influence of a few big developers such as Sun Hung Kai. Conditions in the Asian finance hub's property sector demand that the city's officials must not be touched by the slightest hint of bribery.

ICAC, the anticorruption watchdog, has become embroiled in controversy over Tsang's trial and its investigation of Leung.

During Tsang's trial, prosecutor David Perry QC alleged that to offset part of the rent for the Shenzhen penthouse, Donald Tsang's wife, Selina Tsang Pou Siu-mei, had received HK$350,000 in July 2010 from David Li Kwok-po, the chairman of Bank of East Asia and a shareholder of Wave Media. ICAC had questioned some BEA executives, but not its chairman, Li, over the alleged funds transfer, which had drawn criticism from legal experts and former corruption investigators.

Grenville Cross, a former Hong Kong director of public prosecutions, was quoted by South China Morning Post as saying: "Normally in this type of case, anyone who has or might have relevant evidence … is approached by investigators and invited to assist. However, since the ICAC's decision not to approach Li was presumably endorsed by the prosecution, I can only assume that there was more to this than meets the eye."

In July 2016, under questioning by lawmakers in Hong Kong's Legislative Council, Leung denied any role in the removal of senior ICAC investigator Rebecca Li Bo-lan, who was reportedly leading the ICAC investigation of Leung and UGL. At that time, ICAC Commissioner Simon Peh Yun-lu said Rebecca Li's removal was solely his decision.

In November 2016, the Legislative Council voted down a motion to form a committee to investigate Rebecca Li's departure from ICAC and whether Leung had been involved in it.

The cases of Leung, Tsang and Hui highlight the need for ICAC to live up to its name and operate independently in investigating the most powerful officials without fear or favor. In the meantime, the sentencing of senior officials such as Tsang and Hui will go at least some way towards preserving Hong Kong's reputation as one of Asia's most important finance and business centers.

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