Macau graft trial sees downfall of Joseph Lau and Steven Lo

Joseph Lau and Steven Lo's involvement in the luxury La Scala project turned out to be their undoing, and the development has hit a brick wall

PUBLISHED : Saturday, 15 March, 2014, 4:11am
UPDATED : Saturday, 15 March, 2014, 4:11am

A luxury residential project in Macau has turned out to be the undoing of Hong Kong tycoon Joseph Lau Luen-hung and businessman Steven Lo Kit-sing, culminating in jail terms of five years and three months for corruption and money laundering.

The La Scala development was forced to cease construction and apartment sales in summer 2012 - long before the pair's conviction yesterday - and the sale of the site was voided.

La Scala, located next to the Macau airport, was a project of Hong Kong-listed property developer Chinese Estates, where Lau was chairman.

The turn of events came weeks after Lau and Lo, chairman of entertainment company BMA Investment, were mentioned in April that year at the corruption trial of Macau's former public works minister Ao Man-long. Ao was accused of having received a HK$20 million bribe in the sale of five plots of land covering 78,000 square metres for La Scala.

After Ao lost his appeal in the top court the following month and was jailed for 29 years, Chinese Estates stopped work at the site and halted flat sales. Macau chief executive Dr Fernando Chui Sai-on later invalidated the land transfer contracts.

The 18-month trial saw Lau sack his lawyer, Leong Weng-pun, towards the end and hire another counsel, David Azevedo Gomes. He changed his mind two weeks later, hiring lawyer Luis Mesquita de Melo.

In a rare encounter with the media in September, Lau explained why he terminated Leong's services. "Some people have forced me into a dead end," he said. "I am worried that some lawyers accept everything said against me without defending me when they should."

Lau and Lo's legal woes began in May 2012, when the Macau prosecution pressed charges against them after Ao was jailed. The trial began four months later.

The court heard that in June 2005, Macau launched a closed tender for the land, inviting bids from Jones Lang LaSalle, representing Lo's Moon Ocean, CB Richards Ellis and an STDM-Vigers joint venture. But even before the tender opened, the pair met Ao on various occasions.

The firms had only 10 days to prepare their bids. Jones Lang LaSalle won with a HK$1.37 billion bid, marginally higher than STDM's HK$1.35 billion. Lau later bought out Moon Ocean.

Deputy Prosecutor General Paulo Chan argued that Lau and Lo were aware of the government's plan to sell the land well before the tender became public.

As early as December 2004, Chinese Estates told Hong Kong architectural firm Hsin Yieh to work on a design for the site and to submit a plan before the new year, the court heard. It started feeding the firm more detailed instructions a week before the tender opened on June 16, 2005.

Chan said knowledge of the sale plan allowed Lau and Lo to prepare for it better than other firms, so even if Moon Ocean did not offer the highest bid, it could still win with a better design.

The court was told that words such as "Jones Lang LaSalle" and "airport" appeared in Ao's notebook. Lau's name was also there with an arrow pointing to the words "land tender".

Io Fu-chun, senior investigator at Macau's Commission Against Corruption, also tried to establish the close connections between Lau, Lo and Ao using phone and immigration records and restaurant receipts.

Lo's lawyer Jorge Neto Valente said the evidence was indirect. He said the words in Ao's notebook could be referring to other matters and Lo had businesses in Macau, so it was not unusual for him to visit the city.

Lau was never once at the trial, citing health reasons for his absence. He has declared he never bribed anyone, and claimed his safety would be jeopardised if he entered Macau.