June 10 (Bloomberg) -- Rafael Hui negotiated a private consulting agreement with the billionaire brothers running Sun Hung Kai Properties Ltd. at the same time the Hong Kong pension authority he headed agreed to renew its lease with the company in 2003, the city’s High Court was told.
“Perhaps it was a good deal, perhaps it was the best deal the Mandatory Provident Fund Authority could have ever got,” prosecutor David Perry said yesterday. “It doesn’t matter.” A public official seeking a favor creates an obligation, he said.
Hui, the government’s No. 2 official from 2005 to 2007, received more than HK$35 million ($4.5 million) in the form of payments and unsecured loans from Thomas and Raymond Kwok, the billionaire co-chairmen of Sun Hung Kai, according to the Independent Commission Against Corruption. The three men, and two others on trial for charges including conspiracy to commit misconduct in public office and to offer an advantage to a public servant, have pleaded not guilty.
Hong Kong’s pension authority, known as MPFA, signed a six-year lease at HK$103 million on June 10, 2003, Perry told the court. When the lease was signed, Hui was already living in a rent-free Sun Hung Kai flat, Perry said. MPFA said in an e-mail it doesn’t comment on any court case.
Hui told investigators he didn’t recuse himself from discussions on MPFA’s office because he didn’t see a conflict of interest as he hadn’t agreed to work for the Kwoks yet, Perry told the nine-member jury yesterday, the 19th day of proceedings after preliminary applications and jury selection.
A second jury was selected last week after the first was discharged when one member asked to be excused for medical reasons. The trial is estimated to take until October, Judge Andrew Macrae told jurors.
Raymond Kwok claimed he made one HK$4.1 million payment to Hui before he became chief secretary because “he didn’t want to look mean,” Perry told the jurors on June 6. It was a special bonus for Hui’s consulting work, Kwok claimed, according to Perry.
Hui, 66, was “living way beyond his means,” spending on luxuries, including HK$33,000 for a dinner at an Italian restaurant and HK$42,000 on a watch, Perry said June 6. Hui had 14 bank accounts and 25 credit cards when he started his term as chief secretary in June 2005. In the year ended June 2007, his cash withdrawals and credit card spending exceeded his official income, Perry said.
Hui deliberately misled anti-corruption investigators when they spoke to him in late 2009 and again in early 2010 about his relationship with the Kwoks, Perry said yesterday. At the time, investigators had only uncovered a small portion of the payments the Kwoks had made to Hui, Perry said.
Hui was involved in two projects as chief secretary that Sun Hung Kai was interested in -- the development of the multibillion dollar proposal to build a cultural hub in West Kowloon and another on Ma Wan Island in Hong Kong’s west, Perry told the jurors. Hui, when he acted as consultant for Sun Hung Kai, had advised the developer about the West Kowloon project, Perry said, citing Raymond Kwok’s representations.
Sun Hung Kai owns the city’s two tallest buildings where companies including Morgan Stanley, Credit Suisse Group AG and UBS AG have their Hong Kong offices. The company, which also builds luxury apartments and shopping malls, has said the case has not and will not affect its operations.
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.