Li Ka-shing's showpiece Harbour Plaza Metropolis in Hung Hom may face legal sanctions.
Lands Department officials say a huge function suite outdoors on the seventh floor may be an illegal structure.
The hotel had two illegally built fabric canvases that spread above more than 3,000 sq ft of a balcony garden, a Chinese-language newspaper reported yesterday.
The Patio, as the venue is called, was marketed as a place to host wedding banquets and conferences. It had air conditioning and curtains, spotlights, fans and chandeliers, the newspaper said.
Offering a splendid view of Victoria Harbour, it can accommodate up to 25 banquet tables and about 300 guests.
However, no fire sprinklers were visible, implying a possible fire risk, it said. The balcony originally comprised only an outdoor garden without any built-in structures, a plan of the hotel obtained from the Buildings Department shows.
Li's Cheung Kong (Holdings) built the hotel in 2002. The two canvases, one circular and the other L-shaped, are believed to have been put up as early as 2004.