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Donald Tsang

David Li arranged HK$350,000 cash payment for Donald Tsang’s wife, court hears

Ex-chief executive faces bribery charge and two counts of misconduct in office

PUBLISHED : Tuesday, 10 January, 2017, 12:15pm
UPDATED : Thursday, 12 January, 2017, 11:52am

This was SCMP’s coverage of the misconduct and corruption trial of former Hong Kong leader Donald Tsang Yam-kuen on Tuesday

4.34pm – Tsang’s Shenzhen trip

Tsang was revealed to have arranged a visit to Shenzhen with Wong and David Li – a fellow Wave Media shareholder and chairman of Bank of East Asia – for hours after the government held a press conference to explain the decision to award the radio station a broadcasting licence in 2010.

“They went off to the mainland and they spent time together,” Perry said. “All travelled back to Hong Kong together.”

Perry also pointed out that, around the time public consultation for broadcasting licences were in progress in July 2010, Tsang’s wife withdrew HK$350,000 in cash from the Bank of East Asia’s main branch in Central.

“Who provided that cash on July 16, 2010? David Li,” he said, pointing out that Li “happened to be” one of the shareholders of Wave Media.

4.30pm – Tsang’s radio interview ‘an attempt to limit criticism’

Tsang failed to provide a full explanation of his conflict of interest, despite volunteering a radio appearance to come clean, Perry alleged. Instead, the prosecutor said, that was an act of crisis management.

Perry said Tsang volunteered to go on a programme on Commercial Radio on February 26, 2012, as press interest grew.

Calling Tsang’s decision to go on the Beautiful Sunday radioprogramme “interesting”, Perry said: “[Tsang] didn’t produce a public press statement containing all the details of what he had been involved in, nor a full explanation of what had happened.”

“He still tried to conceal what had been going on. Even when he is volunteering to go on the radio he was concealing the true position,” the prosecutor added.

Perry said Tsang, a public servant since 1967, told the show it did not occur to him that there was a conflict of interest at the time, despite it involving “millions of dollars” and spanning “a period of 14 months”.

“The prosecution say he was not telling the truth. He was trying to manage the situation and limit the criticism,” the prosecutor said.

4.08pm – Tsang accused of ‘betrayal’

Perry told the jury that a duty to declare conflicts of interest should be the “core value” of any public official anywhere in the world, and failing to do so would amount to a betrayal.

He said that that standard applied regardless of whether the public official concerned was “in Hong Kong, or Timbuktu”.

“If you are a public official and conceal the conflict … then you betray the trust that has been placed on you by the law,” he said.

“You would expect [a leader] to lead by example,” he added.

“In this case, the chief executive did not declare any conflict of interest, even though there was an obvious conflict.”

3.50pm – Refurbishment of penthouse was ‘inducement or reward’ for Tsang

David Perry QC, prosecuting, said that in relation to the charge of accepting an advantage, Tsang had allegedly received the refurbishment and redecoration of the three-storey residential property in Shenzhen, even though he had neither a good reason nor permission to do so.

He alleged that Tsang, as chief executive, in return granted Wave Media a digital broadcasting licence, approved the surrender of its sound broadcasting licence and accepted its application to have Arthur Li Kwok-cheung appointed the broadcaster’s director between 2010 and 2012. He said Tsang “accepted [the] advantage as an inducement or reward for – or on account of – his performance”.

The two other charges accuse Tsang of misconduct in public office, in that he allegedly failed to disclose his interest in the Shenzhen property to the Executive Council and those involved in granting official honours and awards in the city.

“This is concealing his links, even though he was hopelessly conflicted and compromised,” the prosecutor said, referring to Tsang’s failure to inform Exco.

As for the nomination of Barrie Ho Chow-law, who was paid to refurbish the Shenzhen property, Perry called it an “abuse of the system”.

3.30pm – Prosecutor explains Arthur Li’s connection to case

Perry also explained the connection of Arthur Li Kwok-cheung and his brother David Li Kwok-po, both former Executive Council members, with Tsang’s case.

Apart from a digital audio broadcasting licence being granted to Wave Media, Tsang also allegedly granted an application for Arthur Li to become the company’s director in January 2012.

Perry pointed out that the approval of Li’s directorship allegedly came just two days after Tsang’s wife’s meeting with a feng shui master in Shenzhen.

3.10pm – Refurbishment work stopped after press uncovered penthouse

After the property came to light in February 2012, the refurbishment work at the three-storey residence stopped, and meetings between the designer and Tsang’s wife were suspended, prosecutor Perry told the jury.

The prosecutor alleged that there had been constant meetings between Tsang and Barrie Ho, the designer commissioned to refurbish Tsang’s rental property in Shenzhen, in the year leading up to the 2012 media report on the house.

On one occasion, the prosecutor alleged, Tsang’s wife even brought a feng shui master with her to a meeting in Shenzhen.

But once the property was uncovered by the press in February 2012, “the work was suspended,” Perry said, adding that there were no more meetings.

“If you are engaged legitimately and honestly refurbishing a property for your own occupation, and it comes to light in the press, why does the work stop?” the prosecutor asked the jury rhetorically.

Perry also alleged that as soon as the property came to light, Tsang tried to distance himself from it and gave an untruthful account.

2.50pm – HK$3 million refurbishment for Shenzhen property

As the trial resumed after lunch, Perry made a further revelation: that the refurbishment work for the “luxurious” three-storey property involved in Tsang’s case cost about HK$3 million, with a well-known designer engaged to carry out the job.

He said architectural designer Barrie Ho Chow-lai was commissioned to oversee the refurbishment and provide a design plan.

“And Barrie Ho’s fee was HK$350,000 for the plan,” Perry said.

The prosecutor highlighted the fact that Ho was allegedly not commissioned directly, but through a company called Shenzhen East Pacific Group. For the plan in particular, the prosecutor said, Ho was paid by another company called East Pacific Holdings.

He added that East Pacific Holdings was directed by Bill Wong, also the director of Wave Media, which was seeking a licence at the time.

“East Pacific Holdings has links to Wave Media,” Perry said.

“Everything was being paid for – refurbishments, designer fees – by one of [Bill] Wong Cho-bau’s companies.”

The first payment of HK$175,000, he said, was in March 2011, and a second one of the same amount was in June 2012.

Tsang went on to nominate Ho as a person suitable for an honour or award under the city’s system of awards and honours “without revealing the true nature of their relationship”, Perry said.

At one point in 2011, the prosecutor said, Tsang’s wife was meeting Ho on a regular basis, just when Ho was awarded a medal of honour.

“What appears to be curious about that award ceremony is that the defendant presented a medal of honour to Barrie Ho but made no mention of fact that Barrie Ho, at the time of the award ceremony, was still heavily engaged in renovation in the exclusive Shenzhen property undertaken for [Tsang’s] benefit,” Perry said, adding that the prosecution’s case was that the defendant had used the award system for his own personal benefit.

The prosecutor alleged that it was “an incentive ... to the man involved in the refurbishment for ensuring that the property in Shenzhen was suitably luxurious for a retired chief executive of the Hong Kong Special Administrative Region”.

1.00pm – A ‘classic conflict of interest situation’

Perry called the allegations against Tsang a “classic conflict of interest situation”, as the former top official had kept his relationship with a businessman secret, leading to a “hopelessly compromised” public position as Hong Kong’s leader.

He said that as chief executive, Tsang’s first loyalty should have gone to the people of Hong Kong. However, Perry said, Tsang allegedly failed to declare his private interest in the property with Wong.

“Instead, he suppressed the information. He concealed it. And despite the fact his public position was hopelessly compromised because of the competing interest – [Tsang] wants the flat, [Wong] wants a licence – [Tsang’s] loyalty was divided,” he said.

As the court clock hit 1pm, marking the lunch hour, the prosecutor said he would continue to set out the allegations in the afternoon. Mr Justice Chan adjourned the case until 2.30pm.

12.55pm – Shenzhen penthouse had gym, tea room, two lounges

The prosecutor further revealed that the floor plan of the three-storey property, in which Tsang wanted to live with his wife after he stepped down in 2012, contained a gym, a landscaped garden, a lounge, a tea room and a second lounge.

12.50pm – Secret negotiations

The events that allegedly took place between 2010 and 2012, prosecutor David Perry QC said, started with Tsang being involved in the government’s discussion on granting a broadcasting licence to Wave Media.

It also concerned, he added, a three-storey 600 square metre residential property in Shenzhen, renovated and refurbished to Tsang’s specifications.

According to the charge, the station’s majority shareholder was Bill Wong Cho-bau, and it was later renamed the Digital Broadcasting Corp.

Perry said: “At the time [Tsang] made those decisions, what Hong Kong people did not know was this: that he was involved in negotiations with one of the owners of Wave Media Ltd.”

12.45pm – Tsang ‘abused his office’, prosecutor claims

Prosecutor David Perry QC laid out the allegations against the defendant, saying they took place in the course of Tsang’s seven-year tenure as the city’s chief executive.

He said the case was about “integrity honesty and standard of conduct in public life in Hong Kong”.

He added: “It’s about this defendant’s relationship with big businesses, his relationship with one businessman in particular, corruption and misconduct.”

Perry set the tone by saying that as chief executive, a public office, Tsang was appointed to serve the people, who had entrusted him with the power.

“But the prosecution’s case is that the defendant abused his office, using it to further his own private and personal interests,” he said.

12.35pm – Prosecutor promises jury ‘a simple story’

Opening the case, prosecutor David Perry QC addressed the jury with the assurance that instead of focusing on the legal indictments, he would tell them “a simple story”.

He also said although there might be documents, he would take the jurors through them, and most of the documents would be in Chinese.

“I can’t speak Cantonese. You can speak English and Cantonese. Please, please be relaxed.”

11.20am – Tsang expressionless as trial begins

Dressed smartly in a navy suit, waistcoat and his trademark patterned bow tie, Donald Tsang looked solemn as he sat in the dock while Mr Justice Andrew Chan made his introductory remarks.

The former chief executive also wore headphones providing an audio feed of the proceedings.

Tsang was expressionless while the charges against him were read, looking mostly at the judge, although he moved his head to watch the nine-member jury as they entered the court.

Over 30 members of the media were also present in the courtroom.

11.14am – Judge reminds jurors to ignore media reports

Before prosecutor David Perry QC was expected to make his opening remarks, High Court judge Mr Justice Andrew Hing-wai once again reminded the nine jurors that they should keep an “fresh and open mind” and rely on only the evidence they would hear inside the courtroom. He cautioned the jury not to pay heed to media reports in particular.

“Things you have seen or read or heard in the media might have been angled,” he said, adding that sometimes media reports might go as far as stirring up emotion and provoking prejudice.

“When [such reports are published], things are sensationalised, the truth suffers,” he warned.

He said only the evidence put before the jury, arranged by the judge, would help them reach the true verdict they had pledged to give in their oaths and affirmations.

The judge also warned the jurors to neither conduct research on the case on the internet, nor take part in any discussion of the case on social media platforms such as Facebook.

Mr Justice Chan said the restriction applied to all matters, from more relevant things, such as their impression of the defendant, to the most trivial, such as the attire of the judge and counsels. They were also told not to discuss the case with their family members.

A court clerk then read for the first time the charges Tsang faced before the jury.

10.30am – Juror told to step down

The judge asked a juror to step down after she failed to properly pronounce the word “almighty” when taking her oath.

The judge added that he did not mean to embarrass the juror in question, but said it was necessary for the jury to demonstrate good enough English to take part in the present trial.

9.05am – Tsang arrives

Sporting his trademark bow tie – this one in navy blue with a floral pattern – the former chief executive turned up at the front gate of the High Court in Admiralty holding his wife Selina Tsang Pou Siu-mei’s hand. Appearing relaxed, he greeted journalists as he entered the court. The jurors – eight women and one man – selected yesterday were officially sworn in this morning.

Background

Tsang, 72, is accused of wilful misconduct in failing to disclose his dealings with businessman Bill Wong Cho-bau over a three-storey Shenzhen penthouse while he was chief executive and presiding over the Executive Council between 2010 and 2012.

Wong was a major shareholder of radio station Wave Media, later renamed Digital Broadcasting Corporation or DBC.

Tsang allegedly “approved in principle and formally granted” applications by Wave Media for a digital broadcasting licence, the surrender of its AM radio licence and the appointment of Professor Arthur Li Kwok-cheung as DBC director and board chairman.

As a reward, Tsang did not have to pay for the refurbishment and redecoration of the penthouse, according to the charges.

He is also accused of recommending interior designer Barrie Ho Chow-lai for nomination ­under the city’s honours system between December 2010 and July 2011, failing to disclose that Ho had been engaged for interior design work for the penthouse.

Tsang has pleaded not guilty to one count of accepting an advantage as the chief executive, under the Prevention of Bribery Ordinance, and two count of misconduct in public office, contrary to common law.