Small-house policy: Hong Kong’s graft-buster charges 2 men for deceiving government into granting building licences for HK$1 billion development
- Edward Wong and Ching Chan-ming were charged with conspiracy to deceive the Lands Department into granting building licences
- ICAC says Ching had started development of project by purchasing ‘ding rights’ from indigenous inhabitants in Yuen Long
Hong Kong’s graft-buster has charged two men with conspiracy to deceive the Lands Department into granting building licences over a span of 14 years for a HK$1 billion (US$127.75 million) development project in the New Territories.
Edward Wong Kwong-wing, 72, operator of Wing Smart Construction Limited, and Ching Chan-ming, 65, indigenous inhabitant representative of Shui Tsiu San Tsuen, were jointly charged at Eastern Court on Wednesday with one count of conspiracy to defraud.
Shui Tsiu San Tsuen is a village in Yuen Long. Under a New Territories small-house policy enacted in 1972 during British colonial rule, every male indigenous villager aged 18 or above may exercise his “ding right” once and apply to the Lands Department to build a small house at his village for his own occupation.
The applicant does not have to pay a land-use conversion fee, which would be hefty under today’s high property values. Eligible villagers cannot transfer their building rights.
The Independent Commission Against Corruption (ICAC) said in a statement on Wednesday that the investigation revealed Ching had started the development of a small-house estate project in Shui Tsiu San Tsuen by purchasing “ding rights” from indigenous inhabitants in Yuen Long around 1996.
Later in about March 2005, Wing Smart, controlled by Wong, entered into an agreement with Ching and appointed him as its trustee to jointly carry out the small housing project.
Ching, who is also a district councillor in Yuen Long, then continued to purchase more “ding rights” from indigenous inhabitants and arranged for them to apply for building licences to construct small houses in Shui Tsiu San Tsuen.
The charge alleged that between May 2005 and May 2019, Wong and Ching conspired together, along with other people, to defraud the Lands Department by “making false representations to induce the Director of Lands and his officers to act contrary to their public duty, namely to grant building licences to applicants who applied for building licences to build small houses under the Policy”.
They had allegedly falsely represented that each of the above applicants was the sole legal and registered owner of the respective lot of land located in Shui Tsiu San Tsuen, according to ICAC.
It is also alleged that the pair had falsely claimed that the applicants had never made any arrangements with anyone to transfer or make deals concerning their respective lots of land, and had no intention of making any private arrangements for their rights to be sold to another individual or a developer.
“ICAC’s investigation revealed that during the above period, a number of small houses were built in Shui Tsiu San Tsuen and sold to members of the public at a market price ranging from HK$9 million to HK$13 million each under the name of a private estate,” it said.
“As a result, Wing Smart received over HK$1 billion for the sale of 115 small houses in the private estate.”
The investigation arose from corruption complaints filed with the ICAC. As it is ongoing, the agency said further law enforcement actions were possible.
At Eastern Court, an ICAC prosecutor asked for a four-month adjournment for the watchdog to conduct further investigations and seek legal advice.
Magistrate Leung Ka-kie released Wong and Ching on bail at HK$500,000 and HK$200,000, respectively, on conditions they observe a travel ban, stay away from all prosecution witnesses, report to police twice a month and tell officers of any change in addresses.
Both defendants reported they had lost some of their travel documents: a home return permit for Wong, and a Hong Kong passport for Ching. Leung exempted the pair from handing over the documents provided they file a report to police about the lost items.
The pair will return to the same court on July 25.
Conspiracy to defraud is punishable by up to 14 years in prison.
