Ex-development chief Mak Chai-kwong charged over alleged rent scam

Former development minister Mak Chai-kwong will appear in court today with a senior civil servant on charges of cheating on government housing allowances.

Mak, 62, and assistant highways director Tsang King-man, 57, face a joint charge of conspiracy to defraud the government of HK$700,000 in the 1980s.

Mak also faces two counts, and Tsang three, of using documents with the intent of deceiving the government, the Independent Commission Against Corruption says.

Documents that the pair used to claim the rent allowances allegedly contained false statements.

The two men were charged when they reported to the ICAC headquarters in North Point yesterday morning.

Also reporting to the ICAC were their wives. The anti-graft body said the two women were not charged and were released from bail.

The two defendants were released on bail and will appear in Eastern Court this morning, pending transfer to the District Court. Both couples left the ICAC building before noon.

Mak found himself in the thick of allegations of abusing housing perks days after he joined the administration of Chief Executive Leung Chun-ying as secretary for development in July.

It emerged that he and Tsang had bought flats in the same North Point block and then rented each other's homes and claimed a government housing allowance on the lease, a practice known as cross-leasing.

Graft-busters arrested the two couples on July 12, just 12 days after Mak took office. He resigned that day, but Tsang remains assistant highways director.

Secretary for Justice Rimsky Yuen Kwok-keung assigned Mak's prosecution to the director of public prosecutions, Kevin Zervos SC, to avoid any perception of bias.

The ICAC alleges Mak and Tsang conspired to defraud the government between June 8, 1985, and December 31, 1990. During the period, Mak and Tsang were engineers with the Civil Engineering and Development and Transport departments respectively.

The two are accused of "concealing and not disclosing that they each had a financial or proprietary interest in the flat that they leased and that the lease was with the wife of the other", and falsely claiming and receiving housing allowances from the government. The corruption watchdog said Tsang took about HK$260,000 and Mak HK$445,000.

It declined to say whether it would look into other instances of cross-leasing, said to be a common practice among civil servants in the 1980s.

The Highways Department said Tsang was on leave. "Because of the legal proceedings, it is inappropriate to make any comment," it said.

Mak, a civil servant for 37 years before his retirement in 2010, was succeeded by Paul Chan Mo-po, who is now under police investigation over accusations of drink-driving and disobeying road markings.