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Rafael Hui & the Kwok Brothers: A Corruption Saga (Part 2)

2014-12-01

As a follow up to our previous article, “Rafael Hui & the Kwok Brothers: A Corruption Saga (Part 1)”, we now revisit the topic as the outcome has finally been decided.  

The long anticipated result of Hong Kong’s largest corruption trial since its return from the British Government’s rule in 1997 has finally been determined, after a span of 131 days.  The decision alone took the jurors five days, which attests to the difficulty of the case. However, before we discuss the result, we will quickly summarise the facts and backgrounds of the case.

Background
The case centres on a total of roughly 3.7 million USD (28.7 million HKD) in payments made to Rafael Hui between 2005, immediately before he took office as the city’s chief secretary, and 2007, shortly after he left.  The payments were allegedly made by the Kwok brothers, Co-Chairmen of Sun Hung Kai Properties Limited (“SHKP”) at the time, and middlemen Thomas Chan and Francis Kwan.  The defendants did not deny the facts of the payments, which were discovered by the ICAC in 2012, but instead disputed on the purpose of the payment.  The defendants claimed that the 2005 payment was part of a verbal agreement supplementing a consulting contract that SHKP had with Mr. Hui.  As the city’s second-in-command, our previous article mentioned the high degree of responsibility that Mr. Hui had, and the consequences should he be found to be guilty of misconduct in public office.

The Jury Has Spoken
After a 45-hour retirement session over 5 days and 4 nights, the jury return with the following verdicts:-

 

Rafael Hui

Thomas Kwok Ping-Kwong

Raymond Kwok Ping-Luen

Thomas Chan

Francis Kwan

Count 1 – Misconduct in public office Mr. Hui allegedly accepted the offer of rent-free flats along with two unsecured loans from Honour Finance – of HK$1.5 million and HK$900,000  – to negotiate a consultancy contract with SHKP when he was the then managing director of the Mandatory Provident Fund Schemes Authority from 2000 to 2003. Mr. Hui did not disclose these to the MPF authority

Guilty

1.5 years’ imprisonment

N/A

N/A

N/A

N/A

Count 2 – Conspiracy to commit misconduct in public office In the period between 1 March 2005 and 30 June 2007 Mr. Hui as the then chief secretary allegedly received HK$5 million from Thomas Kwok, through Fidelity Finance Company, in return for favours to SHKP

Not guilty

Not guilty

N/A

N/A

N/A

Count 3 – Conspiracy to commit misconduct in public office Between 1 March 2005 and 30 June 2007 Mr. Hui as the then chief secretary allegedly accepted HK$4.125 million from SHKP in exchange for favours to SHKP

Not guilty

N/A

Not guilty

N/A

N/A

Count 4 – Furnishing false information Mr. Hui allegedly furnished false information in an accounting document dated 25 April 2005 to support his claim that the HK$4.125 million referred to in Count 3 was a special bonus paid to him by SHKP

Not guilty

N/A

Not guilty

N/A

N/A

Count 5 – Conspiracy to commit misconduct in public office From March 2005 to June 2007, Mr. Hui allegedly received HK$8.5 million from the Kwok brothers, Thomas Chan and Francis Kwan

Guilty

6 years’ imprisonment

Guilty

6 years’ imprisonment and fine of HK$500,000

Not guilty

Guilty

5 years’ imprisonment and fine of HK$500,000

Guilty

4 years’ imprisonment

Count 6 – Misconduct in public office Between 30 June 2005 and 30 June 2007 Mr. Hui as the then chief secretary allegedly failed to declare or concealed from the government of an unsecured loan of HK$3 million granted to him by Honour Finance Company

Guilty

1.5 years’ imprisonment

N/A

N/A

N/A

N/A

Count 7 – Conspiracy to offer an advantage to a public servant Count placed against all 5 defendants for offering advantage to public servant or accepting advantage (HK$11.182 million) as a public servant between 30 June 2005 and 20 January 2009

Guilty

6 years’ imprisonment

Not guilty

Not guilty

Guilty

5 years’ imprisonment and fine of HK$500,000

Guilty

4 years’ imprisonment

Count 8 – Misconduct in public office Between 1 July 2007 and 20 January 2009 Mr. Hui as the then non-official member of the Executive Council allegedly failed to disclose or concealed the HK$11.182 million received from Thomas Chan and Francis Kwan

Guilty

6 years’ imprisonment and return of HK$11.182 million

N/A

N/A

N/A

N/A

Actual Sentence*:

7.5 years’ imprisonment

5 years’ imprisonment and fine of HK$500,000

N/A

6 years’ imprisonment and fine of HK$500,000

5 years’ imprisonment

*after taking into account that the sentenced period for some of the counts would be served concurrently, and after discounts given after plea in mitigation

Inherent contradictions in verdict?
According to news reports, during trial Thomas Kwok and Mr. Hui’s case was that there was an oral agreement between them, in which Mr. Hui would provide consultancy service to Thomas Kwok in return for an annual consultancy fee of HK$15 million. Thomas Kwok and Mr. Hui alleged that both the HK$5 million (Count 2) and the HK$8.5 million (Count 5) were payments made under the consultancy agreement. In this regard, it would seem inconsistent that they were only found guilty on Count 5 but not also Count 2.

Further, it is noted that for Count 7, apart from Mr. Hui, only Francis Kwan and Thomas Chan were found guilty, but both the Kwok brothers were acquitted. Some may think that Francis Kwan and Thomas Chan would not have paid Mr. Hui HK$11.182 million for the benefit of SHKP without the consent of their superior i.e. the Kwok brothers. The trial judge Mr Justice Andrew Macrae briefly addressed on this point during sentencing and commented that he did not find the jury’s verdict on Count 7 inconsistent with his directions. He further commented that one possible reason for the not guilty verdicts for the Kwok brothers may be that the jury found that there was a conspiracy to bribe Mr. Hui in which Francis Kwan and Thomas Chan were a part, but the jury was unsure as to how and when they got the money to bribe Mr. Hui.

Having said that, readers should be reminded that in a jury trial, the jury is only required to inform the court of their decision, but not how and why they reached such decision. Therefore it is impossible for anyone, including the trial judge, to know the exact reason for the verdict. There may well be good reasons or evidence to support the jury’s decisions, but it is nevertheless expected that such seemingly inherent contradictions may be used as a ground of appeal.

Appeal is expected
As at the time of this article being written, all guilty defendants except Mr. Hui had indicated that they intend to appeal the decision. It is hence expected that this is not an end of the case.

 

 

 

IMPORTANT:
The law and procedure on this subject are very specialized and complicated. This article is just a very general outline for reference and cannot be relied upon as legal advice in any individual case. If any advice or assistance is needed, please contact our solicitors.

 

 

 

For enquiries, please contact our Litigation & Dispute Resolution Department:

 

E: criminal@onc.hk 
W: www.onc.hk

T: (852) 2810 1212
F: (852) 2804 6311


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