Firms in Berlusconi case consider raids improper, court told

PUBLISHED : Saturday, 23 June, 2007, 12:00am
UPDATED : Saturday, 23 June, 2007, 12:00am

An Italian prosecution team illegally searched and seized material from four Hong Kong companies allegedly involved in a fraud case concerning former Italian prime minister Silvio Berlusconi, lawyers for the companies told the Court of First Instance.

Gerard McCoy SC argued that the team had 'recklessly or intentionally' misled the Secretary for Justice and the Hong Kong police by inflating the alleged offences and the amount of money involved.

As a result, they secured warrants from a magistrate on January 16 to search and seize materials from Harmony Gold, Wilshire Trading, CS Secretaries and Loong Po Management, and the homes of Harmony Gold directors Paddy Chan Mei-yiu and Katherine Hsu May-chun, he said.

The counsel claimed the prosecutors read more than 1,800 pages of the companies' privileged documents during their search on January 18.

The Secretary for Justice, the Commissioner of Police, police Senior Inspector Leung King-hung and Magistrate William Ng Sing-wai have been named as respondents.

Mr McCoy, acting for the companies and the directors in a judicial review of the legality of the search and seizure operation, also made an application yesterday to take the court to Italy to cross-examine the Italian prosecution team. The team consisted of two Italian prosecutors and two accountants from KPMG.

The application is the first made in a judicial review of a mutual legal assistance matter in Hong Kong. The four Italians may not be summonsed to Hong Kong for cross-examination since they had not filed statements for the judicial review.

The search was part of Italian judicial authorities' investigation into alleged tax fraud, embezzlement and false accounting by Berlusconi.

Mr McCoy said his clients should have the right to challenge decisions made under the Mutual Legal Assistance in Criminal Matters Ordinance.

'So where is the protection in this legislative scheme for individuals in Hong Kong?' he said. 'The answer is, in our submission, the party who is affected by the decision of executives in Hong Kong has got the right to access to justice, which means the decision can be examined for its lawfulness and its correctness.'

'This case may establish new protocols for the participants of foreign law enforcement agents who request search and seizure operations in Hong Kong under the Mutual Legal Assistance Ordinance,' said Andrew Powner, solicitor for the applicants.

Mr McCoy also applied for a court order for the disclosure of the 'letter of request' the Italian government sent to the Hong Kong government last July to seek assistance in investigating the fraud case.

He said the Italian government, in the same week, sent letters making the same request to Ireland and the United States. But a US court found the letter had exaggerated the information about the fraud case, said the counsel, and the raid was judged 'unlawful and reprehensible'.

Mr McCoy said it was 'highly probable' that the letter of request to the Hong Kong government carried the same misinformation.

However, government counsel Wayne Walsh said the letter was a high-level communication between the Hong Kong and Italian governments. He argued diplomatic matters should not be subject to the court's jurisdiction, and its disclosure would affect ongoing investigations.