Ex- development chief and pal get 8 months for fraud
Former development secretary, Mak Chai- kwong, and assistant highways director Tsang King-man received eight- month suspended prison sentences on Thursday for a housing fraud that dated back to the 1980s.
They also received a six-month sentence for the charge of acting as an agent using a document with intent to deceive his principal. Both sentences were concurrent and suspended for two years.
Passing sentence, Judge Johnny Chan Jong- herng said a custodial sentence should normally be imposed due to the involvement of public funds, but “justice is best served by a suspended term of imprisonment”.
Mak and Tsang, acquainted since college, had each purchased an apartment in City Gardens on the same day in 1986. They later applied for private tenancy allowances (PTA) from the government.
Government records showed they had cross-leased the flats to each other, but transaction records from the early 1990s showed they had pocketed proceedings earned from the sales of the flats they had lived in.
They were hence considered as the effective owners of the flats in which they had applied for PTAs, rather than tenants, as their employer was told. But the lid only blew off several days after Mak took office on July 1, 2012.
Mak quit on July 12, 2012. He and Tsang were then charged and tried, and convicted of the offenses on June 24.
Unlike previous convicted cases of housing fraud, the two men had no alternate benefit option to cover their mortgage payments.
Cross-leasing was permitted under the PTA scheme, which was said to contain “structural deficiency”. Even the ownership swap made it an offense, but Chan acknowledged the men made no additional monetary gain by crossing the line.
He also agreed the level of public expectation for civil servants in the 1980s was different from that of now. The “gravity” of the offences was hence summarized by the judge as “on the low side of the scale”.
The sentencing has also taken the two men’s “outstanding contributions to the society” into account.
Mak’s character, for instance, earned positive words from former administration chiefs Stephen Lam Sui-lung and Henry Tang Ying-yen, and Vice-Chancellor of the University of Hong Kong (HKU), Tsui Lapchee. Finance secretary, John Tsang Chun-wah, also made a last-minute submission.
Current Chief Secretary for Administration Carrie Lam Cheng Yuet-ngor was not on the list. But she told reporters on Thursday after a tour in Tuen Mun that if she was invited, she would write in favor of Mak’s conduct and contributions.
The two men have also repaid the allowances with interest. Mak paid HK$740,000, while Tsang deposited HK$1.19 million in the government’s account on June 28.
They both showed signs of relief after hearing the sentence. Leaving the courtroom, Mak raised his thumb to a group of friends at the public gallery, with a smile on his face. He and Tsang later shook hands inside a conference room.
Outside the court building, both Tsang and Mak thanked their families and friends for the support over the past year as they ran into TV crews. Mak also said he felt bad for his college pal.
“I’m very sorry for involving Mr Tsang in this particular case,” said Mak. “I think if I had not taken up this post last year, this whole thing would not have appeared.” The pair has 28 days to file an appeal and Mak said he will discuss with Tsang what to do next.
Mak has been a part-time lecturer at the HKU since February, but did not say whether he would stay in the job. “There is nothing else I can tell,” he said.
Tsang is set to retire from his post next year. The Civil Service Bureau told RTHK that it will consult the Public Service Commission as part of the procedure to determine whether Tsang has to quit early.
Process will also begin to determine whether the two convicted men could keep their pensions. Judge Chan said it was not a certainty that they will lose their pensions.
Former development secretary Mak Chai-kwong leaves the District Court in Hong Kong on Thursday.