Mak Chai-kwong

Mak only 'took advantage of grey area', lawyer says

Defence argues the former development minister was not trying to take unfair advantage of housing scheme for officials

PUBLISHED : Monday, 27 May, 2013, 3:13pm
UPDATED : Tuesday, 28 May, 2013, 2:56am

The lawyer representing a former minister accused of defrauding the government has insisted his client was not trying to take unfair advantage of a housing scheme for civil servants.

Eric Kwok Tung-ming SC said former development secretary Mak Chai-kwong was only "getting around structural deficiencies" in the housing allowance system, not trying to defraud the government, at Mak's trial in the District Court yesterday.

Mak, 62, and former assistant highways director Tsang King-man, 57, are accused of defrauding the government of HK$700,000 by using two properties in which they had a financial interest to claim rental allowances between 1985 and 1990.

Mak faces two counts, and Tsang three counts, of using documents with intent to deceive the government.

During the defence's final submission, Mak's lawyer asked judge Johnny Chan Jong-herng to "put himself in the [1985] position, the moral values and the deficiencies of that time".

"A reasonable man may be of the view that the defendant took advantage of a grey area in the regulations, in that financial interest … [in the leased property] was not explained or defined prior to March 3, 1989," he said. "Before that clarification, what [the defendants] did was not necessarily illegal."

The prosecution said the pair were the genuine owners of the City Garden flats they rented from each other, and that they used the flats to claim housing subsidies from the government.

Daniel Marash SC, for the prosecution, said that while cross-leasing by civil servants has, strictly speaking, never been illegal, there is no valid explanation for the defendants not renting properties to each other in their own names, and certainly no reason for them to have stated inaccurate addresses for their wives.

The defence denies the operation of a cross-leasing arrangement, arguing that the two men swapped ownership only in late 1990, when Tsang failed to sell his original flat to a buyer who did not want a tenancy agreement included in the purchase.

Mak then agreed to swap flats with Tsang, the defence said, and to allow Tsang to sell his flat under a declaration of trust - but the legal document related to that had gone missing.

Tsang's lawyer, Cheng Huan SC, said that even if the pair did cross-lease their flats, as testified by defence witness Joseph Wong Wing-ping, a former secretary for the civil service, cross-leasing did not breach regulations and was a common practice.

Cheng also argued that the prosecution's delay in bringing charges against his client had substantially prejudiced the case.

He said the delay, and the lack of financial documents, meant the court should give Tsang the benefit of doubt and acquit him.

The judge will hand down a verdict on June 24.