Monday 15 December 2014

Billionaire Kwoks Brace for Hong Kong’s Hui Bribe Ruling

Jurors in the trial of Hong Kong billionaire brothers Thomas and Raymond Kwok started deciding if the Sun Hung Kai Properties Ltd. (16) co-chairmen conspired to bribe the city’s former No. 2 official.
“There must necessarily be discussion and debate,” Judge Andrew Macrae told the jury of six women and three men today after concluding his summary of the 127-day trial. “You must at all time stay true to your oath and affirmation.” At least seven of the jurors have to be in agreement to reach a verdict.
Hong Kong’s highest-profile graft trial centers on whether secret payments to former chief secretary Rafael Hui were bribes or legitimate remuneration for advising the
city’s biggest developer. While the case has brought scrutiny to the relationship between government officials and businesses, Macrae told jurors to set aside their emotions when judging the evidence.
Hui, the Kwoks and two other men are accused of conspiracy and misconduct charges involving more than HK$35 million ($4.5 million) in payments and loans from 2000 to 2009. All five men have denied the eight charges. Hui, 66, and Raymond Kwok, 61, face as long as 10 years in jail if convicted of furnishing false information. The other charges each carry a maximum sentence of seven years.
Photographer: Lam Yik Fei/Bloomberg
Thomas Kwok, co-chairman of Sun Hung Kai Properties Ltd., arrives at the High Court in... Read More
The Kwoks’ arrest on March 29, 2012, sparked the company’s biggest share plunge in 14 years. The stock tumbled 13 percent the next day to HK$96.50, erasing $4.9 billion in market value. The five men were charged in July that year. Sun Hung Kai closed at HK$112.50 in Hong Kong trading today.

‘Sweet’ Payments

Payments on a HK$15 million unwritten consultancy agreement had to be kept secret due to disputes within the Kwok family, the defense said. The sums were meant to keep Hui “sweet” on Sun Hung Kai, prosecutors said.
Hui testified he didn’t see a conflict of interest when the city’s pension authority, which he led from 2000 to 2003, renewed a lease at a Sun Hung Kai property while he was negotiating his consultancy contract with the Kwoks.
Hui, who was HK$7.8 million in debt before he became chief secretary in 2005, testified that he evaded taxes on some of his payments from Thomas Kwok, 63. Hui also spent more than he earned on extravagant meals, music records, concerts in Europe and gave at least HK$7 million to a mistress in Shanghai.
While there’s no excuse for Hui’s behavior, “this is not a court of morals,” Edwin Choy, a lawyer for Hui, had told the court. The jury should only consider whether the lifelong civil servant abused his office, Choy said.
Photographer: Lam Yik Fei/Bloomberg
Raymond Kwok, co-chairman of Sun Hung Kai Properties Ltd., right, arrives at the High... Read More
Rival Spy?
Some payments to Hui were made circuitously with the help of Sun Hung Kai director Thomas Chan and former stock exchange official Francis Kwan to avoid upsetting the eldest brother Walter Kwok, defense lawyers said.
As Sun Hung Kai’s chairman in 2004, Walter feared Hui was a spy for rival property developer Li Ka-shing, and only agreed to a HK$4.5 million-a-year consultancy for Hui, the court heard.
Walter was “vilified” by the defendants, prosecutor David Perry said. Walter, who was ousted as chairman in 2008 by his younger brothers, isn’t a party to the trial.
Thomas Kwok was “untruthful and evasive” in blaming Walter for the secrecy required and invented the oral agreement, the prosecutor said. “There are too many coincidences in this case for them to be coincidences,” he said.
Walter became ill and paranoid after his 1997 kidnapping and their mother thought he was manipulated by his mistress, witnesses including Thomas Kwok told the court.

No Favors

Hui never did Sun Hung Kai any favors, lawyers for the defendants said in closing arguments last month.
Prosecutors’ “total failure to prove that Rafael Hui did anything for his money rather proves that wasn’t the purpose of the money,” Chan’s lawyer Ian Winter said.
Photographer: Lam Yik Fei/Bloomberg
Rafael Hui, Hong Kong's former chief secretary, arrives at the High Court in Hong Kong,... Read More
Raymond Kwok, who didn’t testify, only knew about a payment that was properly reported, his lawyer John Kelsey-Fry said. “The prosecution have had two-and-a-half years to prove their case and they haven’t,” Fry said.
The law doesn’t stipulate that a particular favor had to be identified for payments to be considered a bribe, Judge Macrae told the jury last week. It’s rare that direct evidence, such as a video of the incident, is available, he said.
“The confidence the public are entitled to have in the fair and impartial duties of the public official is thereby eroded or destroyed” when payments of that nature occurs, he said.

Reasonable Doubt

Far from favoring Sun Hung Kai, Hui was responsible for destroying their bid for a West Kowloon property development, Thomas’s lawyer Clare Montgomery said. Hui also suggested the Kwoks write to the official responsible for another project, she said.
“Isn’t that a classic Hong Kong civil service move? Push any decision to someone else. That way you don’t have to do anything and nobody can criticize you,” Montgomery said.
The verdict must be not guilty “unless you are sure there was no verbal agreement, that the payments were indisputably corrupt,” she said.
The case is Hong Kong Special Administrative Region v Rafael Hui, Thomas Kwok, Raymond Kwok, Thomas Chan and Francis Kwan, HCCC98/2013, in Hong Kong’s High Court.

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