Macau flats linked to graft case still on sale

PUBLISHED : Friday, 25 May, 2012, 12:00am
UPDATED : Friday, 25 May, 2012, 12:00am


Sales of flats in a luxurious project being developed in Macau by Chinese Estates on land linked to a corruption trial were continuing yesterday, a day after a court ruled that company chairman Joseph Lau Luen-hung had a case to answer on bribery charges.

The sales prompted warnings by Macau lawmakers that buyers might lose out because the government could revoke the sale of the land on which the HK$20 billion La Scala is sited, as it has done with 16 other deals approved by jailed former public-works chief Ao Man-long.

At least 600 flats in La Scala, being built on five plots of land facing the Macau airport in Taipa, have already been sold.

A verdict is awaited in the Macau Court of Final Appeal on bribery and money laundering charges against Ao in connection with the deal.

During the trial - the latest in a series of corruption cases against the jailed former official - the court heard that Hong Kong tycoons Lau and Steven Lo Kit-sing had allegedly offered HK$20 million to Ao during bidding for the land.

It was won by Moon Ocean, a company formerly owned by Lo and now by Chinese Estates.

Macau lawmakers say sales in La Scala should be put on hold until all the legal proceedings are over.

Legislator Au Kam-san said that based on previous cases, the sale could be revoked, and if it was buyers would have to seek compensation from the developer.

'When the land is tied to corruption and there is a possibility the sale could be revoked, they should not be selling the flats any more,' he said.

Au earlier lodged a complaint with Macau's Commission Against Corruption about the government's approval of expansion of the construction area from 39,000 square metres to 73,000 square metres before the trial ended.

Another Macau lawmaker, Paul Chan Wai-chi, said potential customers should take the legal situation into consideration.

'When legal proceedings are ongoing, the government, if it is a responsible one, should temporarily put the project on hold. It would be fairer and protect buyers,' he said.

Macau media reported that Secretary for Transport and Public Works Lau Si-lo told legislators last week that 16 land deals tied to Ao's previous bribery cases had been cancelled, and that he would make a decision on the La Scala land after the court's judgment.

Before this week's ruling in Lau's case, a South China Morning Post reporter posed as buyer to make inquiries at the La Scala sales counter in Windsor House, Causeway Bay.

Two Centaline property agents, one from Hong Kong and one from Macau, arranged for the reporter to visit a showroom in Wan Chai.

In an hour of promotion, neither agent mentioned the court case and the potential risk of revocation until asked about it.

'It has nothing to do with Lau,' the Hong Kong agent said. 'He is assisting the investigation. He just provided information on whether Ao has a problem. He did not pay the bribe. If he had, he would have been charged. There is no need for the prosecution to think so long about this.'

A HK$20 million 'consultancy fee' cheque, co-signed by Joseph Lau and his brother Thomas Lau Luen-hung in October 2005 to a Macau company set up by Lo, was among the documents presented by Macau's Commission Against Corruption investigators on May 2 during Ao's trial.

The court heard the document was confiscated from Ao's former home in late 2006.

The money was subsequently passed to Ecoline, a company controlled by Ao, after the sale of the airport land, the court was told.

Iau Teng-pio, a University of Macau law professor, said a defendant should be treated as innocent until proven guilty, and that the La Scala sales were legal, at least for now. It was too early to say if the government would revoke the land deal 'but customers should consider the risk themselves if they want to buy a flat'.

Hong Kong barrister Albert Luk Wai-hung said there was no legal problem in selling the flats, as the case did not affect their ownership.

'But ethically, as a responsible developer, Chinese Estates should tell its customers about the case and let them consider whether or not to buy. There is, after all, a risk here.'

Centaline Hong Kong and Centaline Macau said they would not comment now.