Corruption in China

Snag over owners in Macau land grab

PUBLISHED : Tuesday, 12 June, 2012, 12:00am
UPDATED : Tuesday, 12 June, 2012, 12:00am


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Complicated ownership issues will have to be resolved if the Macau government seeks to seize five plots of land at the centre of a corruption case involving jailed former public works chief Ao Man-long and two Hong Kong tycoons, legal experts said.

They were speaking as a document seen by the South China Morning Post - apparently prepared as legal advice to one of the parties involved - suggested that the government could not invalidate the land deals because they were made between private companies.

The office of Macau's Secretary for Transport and Public Works said last week it did not rule out declaring the transfer of the five pieces of land invalid after confirmation of last month's verdict on Ao. Yesterday was the deadline for anyone to raise objections to the verdict on Ao, but no one had done so by 4pm, a government source said.

A HK$20 billion luxury development, La Scala, is being built on the land by Hong Kong developer Chinese Estates, whose chairman is tycoon Joseph Lau Luen-hung.

The Court of Final Appeal ruled last month that the land was awarded to Moon Ocean, a company then owned by tycoon Steven Lo Kit-sing and later sold to Lau, after Ao received HK$20 million in bribes from Lau and Lo.

It sentenced Ao to 29 years in jail for corruption and money laundering. Lau and Lo were also charged with bribery and will face trial. Macau lawyer Miguel de Senna Fernandes said yesterday that whether the government could invalidate the land deals depended on whether it had owned the land.

'The ownership issue is very important ... it is complicated and I do not want to speculate,' he said.

He said the government could not invalidate the land deals based solely on the verdict on Ao. It would need to initiate another court hearing, which would take time.

The court earlier heard that in 1995, the vacant land adjacent to Macau airport was divided up at the government's suggestion into five areas, each managed by a different firm.

The five companies - Tai Lei Loi, Sun Hung Fat, Sun Hou Kung, Sun Vai Ip and Lei Tin - were managed by a sixth, Lei Pou Fat, which was jointly owned by the Macau government, which had an 88 per cent stake, and three private businesses.

The legal advice seen by the Post suggested that contracts for the sale of the land were signed in 2005 between the five companies and Moon Ocean for 1.368 billion patacas, and were approved by the government.

The document said four of the five companies shared the profit and were dissolved.

'Even if the former secretary [Ao] was condemned, this would not alter the effectiveness of the contracts signed on October 12, 2005,' it said.

It also said the verdict on Ao would not affect the 300 buyers who had bought flats in La Scala from Lau's Chinese Estates, as they were legal deals protected by law.

Iau Teng-pio, assistant professor of law at University of Macau, said after studying the contracts that the land had been transferred from the five companies to Moon Ocean with the government's approval.

But he did not agree that the government could not seize the land as the approval was made under the influence of Ao.

'There would be two situations, either the land would be returned to the [five companies] or the government,' he said.