Rafael Hui given ‘very rare’ HK$5.4m loans by SHKP subsidiary, graft trial hears

Co-defendant of former chief secretary approved the requests, court hears; HK$3m never repaid

PUBLISHED : Friday, 08 August, 2014, 11:40pm
UPDATED : Saturday, 09 August, 2014, 1:01am

Former chief secretary Rafael Hui Si-yan obtained HK$5.4 million in "very rare" unsecured loans from a Sun Hung Kai Properties subsidiary, the High Court heard yesterday.

The decisions to approve the three loan applications for the man who later became the city's No 2 official in 2005 were all made by Raymond Kwok Ping-luen, the current SHKP co-chairman. Kwok is also a defendant in the high-profile corruption trial, which has heard he and his brother and co-chairman Thomas Kwok Ping-kwong allegedly gave tens of millions of dollars to Hui to be their "eyes and ears" in government.

Hui "never repaid" HK$3 million of the loans to the SHKP subsidiary Honour Finance, according to Alex Au Mo-cheung, who retired as the firm's chief executive in 2011.

"In fact, it was very rare for Honour Finance to provide unsecured loans," Au, who handled two of Hui's three loan applications between 2000 and 2004, testified. "The provision of loans to persons who are not [SHKP property] purchasers was not [part] of our ordinary business," he said.

"Of course, Mr Hui was not an ordinary client," Au testified. "My colleagues and I were very careful in doing our work. We all knew that Mr Hui was a public figure."

Hui's first loan was approved in 2000, after "Mr Raymond Kwok passed me a handwritten note on which it was written that an unsecured loan in the amount of 0.9 million was being asked for ... by Mr Rafael Hui," Au said.

Hui sought what prosecutor David Perry QC called a "favourable" interest rate at "below prime" - in vain. "As a borrower of course he would like to have the lowest possible interest rate," said Au. "However, finally ... it was decided that the interest rate should be fixed at the prime rate."

In December the following year, Au's colleague handled another application from Hui - this time for HK$1.5 million - "as per [the] instruction" of Raymond Kwok. Hui claimed he needed the sum for "personal investments".

In 2004, Hui telephoned Au asking for HK$3 million for what he called a "short-term loan for tax-planning purposes". He proposed repaying the interest within a year, and to negotiate loan extensions thereafter.

The principal, this time, was never repaid, having been extended six times every year up to 2010. "Was it ever repaid?" Perry asked.

Au replied: "No."

"Were you told that Mr Hui was acting [around 2004] as a consultant to SHKP?"

"No," Au replied.

Hui, 66, stands accused of failing to disclose the first two loans to the Mandatory Provident Funds Scheme Authority, of which he was managing director before 2003, and the third loan to the government when he was chief secretary. All told, he faces eight charges related to misconduct in public office and bribery.

Thomas Kwok, 62, faces one charge of conspiracy to offer an advantage to Hui and two counts of conspiracy to commit misconduct in public office. Raymond Kwok, 61, faces four charges, including one with Hui of furnishing false information. SHKP executive director Thomas Chan Kui-yuen, 67, and former Hong Kong stock exchange official Francis Kwan Hung-sang, 63, each face two charges.

All plead not guilty.