Hong Kong former official, property tycoon guilty in graft case
HONG KONG
Raymond Kwok, co-chairman of developer Sun Hung Kai Properties, walks into the High Court in Hong Kong May 8, 2014.
CREDIT: REUTERS/BOBBY YIP
(Reuters) - A former top Hong Kong civil servant was found guilty on Friday of accepting HK$8.5 million ($1.1 million) in bribes from executives of property developer Sun Hung Kai Properties Ltd (0016.HK), in the city's highest profile corruption case.
The jury of six women and three men reached their verdicts after deliberating for five days following a trial that exposed the cozy relationship between the city's powerful developers and government in the former British colony.
Rafael Hui, 66, who headed Hong Kong's civil service from 2005 to 2007, was found guilty of three counts of misconduct in public office and two counts of conspiracy to commit misconduct. He had faced eight charges related to bribery and misconduct in public office, all of which he denied.
Raymond Kwok, 62, co-chairman of Sun Hung Kai Properties, the city's largest developer, was cleared of all charges.
But his brother and fellow co-chairman, billionaire Thomas Kwok, 63, was found guilty of one count of conspiracy to commit misconduct in public office. He had pleaded not guilty to that and two other charges.
Raymond said he was happy he had been proved innocent although he was sad for his brother.
"We'll continue to support Kwok Ping-kwong and his family," he said, referring to his brother.
Thomas Kwok, who resigned as chairman, managing director and executive director with immediate effect, will appeal against his conviction, the property developer said in a statement to the Hong Kong stock exchange.
Sun Hung Kai's board has appointed Adam Kwok, son of Thomas Kwok, as an executive director, the statement added.
The usually-jovial Hui, friends with the Kwoks since childhood through Macau family connections, sat expressionless, staring at the judge as the verdicts were announced.
The judge is expected to sentence the defendants, who face years in prison, on Monday.
The guilty verdicts send a message that Hong Kong's powerful political and business elite are not untouchable in a city where many believe they have enjoyed unfair privileges.
Hui's conviction by Hong Kong's Independent Commission Against Corruption had been widely expected given the strength of the evidence against him. It provides a boost to the powerful anti-graft agency, which has faced criticism in recent years that it has struggled to land big cases.
It has also been under fire over public perceptions that its leaders have too eagerly courted relations with mainland officials, putting its vaunted independence at risk.
Shares of Sun Hung Kai Properties, which has a market value of $41 billion, were suspended just before the verdicts were announced. They had risen more than 1 percent on Friday, in line with the benchmark index .HSI.
Trading of shares will resume on December 22.
Sun Hung Kai executive Thomas Chan and businessman Francis Kwan were both found guilty of two charges of conspiracy to commit misconduct in public office and conspiracy to offer an advantage to a public servant.
EYES AND EARS
The case, involving millions of dollars in payments to former chief secretary Hui, threatens to tarnish the reputation of Hong Kong's vaunted civil service.
Hui had been accused of accepting millions of dollars in payments between 2005 and 2007, including HK$8.5 million in the months leading up to his appointment as chief secretary.
The corruption trial highlighted lavish spending by Hui, a racehorse owner and opera fanatic who enjoyed an extravagant lifestyle. He admitted to spending HK$200,000 on records in a single day in 2007 and traveled internationally to indulge his passions.
Prosecutors accused him of spending "vast sums" on costly organic bran and carrots for his thoroughbred horse.
Hui, who has been married since 1974, also said he had lavished millions on a young Shanghai woman after they started a relationship in 2008.
The tales tarnished a public service career in which he rose through the colonial-era ranks to become the deputy to Hong Kong's outgoing chief executive, Donald Tsang.
Hui had left the government in 2000 and turned down several high-profile civil service posts before Tsang, an old friend and colleague, persuaded him to return as chief secretary in 2005.
The property tycoons had spent much of the more than 100-day trial defending themselves against charges of having given Hui millions of dollars to be their "eyes and ears" in government.
Hong Kong returned to Chinese rule in 1997 and has a separate legal system from the mainland.
The arrests in 2012 sent a shock through Hong Kong's business community, a small, close-knit group of tycoon-led families who control much of the city's business and hold substantial political influence.
But the trial itself was overshadowed by more than two months of pro-democracy protests in the former British colony.
Sun Hung Kai developed Hong Kong's two tallest buildings, the International Finance Centre and the International Commerce Centre, which stand on either side of Victoria Harbour.
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