Hong Kong’s leader refused to hand over a fugitive to the US last year following a request by mainland Chinese authorities, in the first such case since the city’s handover from Britain to China, American officials have revealed. The extradition request concerned a hacker from Macau who was arrested in the city while accused of breaking into US law firms’ computers and making millions from stock trades fuelled by ill-gotten information. The US Department of State said in an annual report issued on Tuesday in Washington that Chief Executive Carrie Lam Cheng Yuet-ngor turned down an extradition request “at the behest” of the central government in October. The report did not mention the particulars of the case. The detainee was released into “central government custody” on the basis that Beijing was “pursuing a separate criminal action”, the Hong Kong Policy Act Report read. “This was the first such instance since 1997,” it said of the refusal. “The central government has provided no information as to the disposition of its own case against the individual.” The new report was submitted to inform the US Congress on key issues and developments in Hong Kong from last September to April. The broken extradition negotiation was identified in a high-profile New York bribery investigation into former Hong Kong home affairs minister Patrick Ho Chi-ping as prosecutors opposed his bail application , the Post has found. In the case, a hacker named Iat Hong, 28, was arrested in Hong Kong on Christmas Day 2016. Local law enforcement officials were given credit for “assistance in the arrest and apprehension”. Hong was charged by the US Securities and Exchange Commission for hacking the computer databases of unnamed New York law firms and using the information gained in 2014 and 2015 to trade stocks, as part of a gang of three that made more than US$4 million. To extradite Hong, a Macau resident, US prosecutors said they had to go through a “lengthy, cumbersome” process requiring first-hand statements “for all witnesses” including “document custodians”. However, the talks broke down in October last year. “After nearly 10 months of extradition proceedings in Hong Kong, the [US] government’s extradition application was denied,” the prosecutors said. “Hong thus has not been – and it appears never will be – extradited.” Beijing’s liaison office free to do its own thing, Hong Kong leader Carrie Lam says A government source confirmed on Wednesday that the US requested Hong’s extradition, but was turned down. The source said Hong did not have right of abode in Hong Kong and was detained for a period before being released, and stressed the government was not pressured by Beijing, but declined to mention where Hong left to. The US prosecutors did not spell out in the submission the reason for Hong’s arrest in Hong Kong or his whereabouts after talks broke down. The Hong Kong government handles the surrender of fugitive offenders in accordance with Hong Kong law Government spokesman Asked about the State Department report, a Hong Kong government spokesman declined to comment, saying: “The Hong Kong government handles the surrender of fugitive offenders in accordance with Hong Kong law.” Authorities in the city have usually worked with law enforcement agencies in the US and generally accepted requests for extradition under a bilateral agreement that came into effect in 1997. The city's Department of Justice did not respond to questions on why the extradition request was rejected. Democratic Party legislator James To Kun-sun noted it was rare for a leader to intervene in such a case, ahead of court proceedings. He urged Lam to explain why she refused to extradite Hong, including whether it was motivated by China's national interest. He said failure to explain would risk casting doubt among other countries over the "one country, two systems" policy, under which the city is ruled by Beijing but promised a measure of autonomy. Chinese foreign ministry spokeswoman Hua Chunying said she was not familiar with the case, but said China resolutely opposed the US State Department's report. Hua insisted the central government strictly adhered to its constitution and the city’s mini-constitution, the Basic Law. But US prosecutors in Ho’s case noted the deal contained “numerous exceptions that might be cited to deny an extradition request”. One exception allows Hong Kong to refuse to surrender Chinese nationals when the request “relates to the defence, foreign affairs, or essential public interest or policy of [China]”. The US and China do not have an extradition treaty. Separately, the State Department criticised mainland Chinese authorities for diluting Hong Kong’s “high degree of autonomy” as enshrined in the Basic Law . It raised the example of Beijing officials repeatedly stressing the Basic Law is subordinate to the Chinese constitution and former Basic Law Committee chairman Li Fei saying the central government “jointly” governs Hong Kong. It also cited the approval by China’s top legislative body of a controversial joint checkpoint plan in Hong Kong that would make mainland laws applicable in West Kowloon station for a high-speed cross-border rail project .