Hong Kong tycoon Thomas Kwok, ex-official Rafael Hui found guilty of corruption: What is the case about

(From left) Thomas Kwok , co-chairman of Hong Kong developer Sun Hung Kai Properties, Rafael Hui, former Hong Kong's chief secretary and Raymond Kwok, co-chairman of developer Sun Hung Kai Properties. -- PHOTO: REUTERS
(From left) Thomas Kwok , co-chairman of Hong Kong developer Sun Hung Kai Properties, Rafael Hui, former Hong Kong's chief secretary and Raymond Kwok, co-chairman of developer Sun Hung Kai Properties. -- PHOTO: REUTERS

This article was first published on Dec 19, 2014, and updated on June 14, 2017.

HONG KONG - Hong Kong’s top court upheld a corruption conviction against billionaire property tycoon Thomas Kwok on June 14, 2017, putting an end to a years-long landmark court battle.

Kwok was sentenced to five years in jail and fined HK$500,000 (S$88,617) in 2014. He had already served part of that sentence before the appeal.

The landmark trial has exposed the cozy relationship between powerful tycoons and officials in Hong Kong, with Sun Hung Kai paying former top civil servant Rafael Hui millions of Hong Kong dollars in bribes, indirectly through two others, to gain government favour.

Hui was found guilty in 2014 of accepting HK$8.5 million (S$1.44 million) in bribes from executives of property developer Sun Hung Kai Properties Ltd.

Hui, 66, who headed Hong Kong’s civil service from 2005 to 2007, was found guilty of three counts of misconduct in public office and two counts of conspiracy to commit misconduct. He had faced eight charges related to bribery and misconduct in public office, all of which he denied.

Raymond Kwok, 62, co-chairman of Sun Hung Kai Properties, the city’s largest developer, was cleared of all charges.

We look at the high-profile trial which lasted seven months, and the key players involved:

What is the case about?

The Kwok brothers were charged with a total of seven offences, including claims related to alleged payments and loans offered to Hui totalling more than HK$34 million.

Hui headed Hong Kong's civil service from 2005 to 2007 under the administration of former chief executive Donald Tsang.

He was accused of receiving financial inducements that included HK$28.8 million in cash, HK$5.4 million in loans and the rent-free use of two luxury flats in Happy Valley between 2000 and 2009.

The oldest accusations against Hui went back to 2000 when he allegedly failed to disclose negotiations with SHKP for a "consultancy agreement" while he was managing director of the Mandatory Provident Fund Schemes Authority, a government body, reported the South China Morning Post. According to the prosecution, he received HK$2.4 million in unsecured loans from a company owned by SHKP.

As he rose to be chief secretary in 2005, he was allegedly bribed with millions in cash by the Kwoks in return for being "favourably disposed" to the property moguls.

The Kwoks were arrested in in March 2012.

Who are the Kwok brothers?

They run Hong Kong's biggest property developer by market capitalisation. With an estimated family wealth of US$17.5 billion, the two brothers were ranked fourth on the Forbes Hong Kong 2014 rich list.

Sun Hung Kai Properties Ltd owns some of the city's most iconic real estate including its tallest tower, the 118-floor International Commerce Centre. It also counts Hong Kong telecom, bus and waste management units as part of its empire. It has a market value of US$34 billion.

The company was founded in 1963 by family patriarch Kwok Tak Seng. Born in Zhongshan, in China's Guangdong province, he moved to Hong Kong after World War II. He partnered Mr Fung King Hey and Mr Lee Shau Kee to establish Sun Hung Kai Properties in 1958.

The Kwok brothers are known for being extremely devoted to their mother, Madam Kwong Siu-hing, and their evangelical Christian faith.

Thomas is married with four children. Born without an ear canal, he often failed English dictation in school, said Bloomberg News. His hearing improved after getting an aid implanted in Britain. He has a Master's degree in business administration (MBA) from London Business School, University of London, and a Bachelor's degree in Civil Engineering from Imperial College, University of London.

Raymond, who is married with three children, has a MBA from Harvard University and a law degree from Cambridge University.

When was the last time the Kwoks made headlines?

The Kwoks tried to keep a low profile, but a kidnapping episode and a bitter boardroom coup within the family made headlines in Hong Kong.

When the Kwok patriarch died of a heart attack on Oct 30, 1990, at the age of 79, he left behind his wife and three sons. Eldest son Walter became chairman and chief executive of the company.

In 1997, Walter was kidnapped by a prominent gangster. It is said that his mother, Madam Kwong, held a secret meeting with the gangster to negotiate his release and forked out HK$600 million - the biggest ransom paid in Hong Kong history. The kidnapper was caught and executed by firing squad in China in 1998.

In 2008, a bitter battle for control of the SHKP empire exploded into public view.

Thomas and Raymond, and their mother, took control after claiming that Walter was mentally disturbed and unfit for duty - claims that the latter denied.

Some reports claimed that the family was furious that Walter, a married man, had a long-running affair with a lawyer and had tried to bring her onto the board of SHKP.

Walter was ousted from the family trust and relegated to a non-executive director post. Madam Kwong took over as chairman until December 2011 when Thomas and Raymond became joint chairmen.

There is speculation that the corruption trial might be tied to a court case filed by Walter years ago in an effort to save his job. He had claimed that he was being forcibly removed as chairman because he wanted to investigate certain matters within the company and improve its corporate governance.

Who is Rafael Hui?

He is said to be a long-time Kwok family friend and once special adviser to SHKP.

Nicknamed "king of strategy", he was seen as the most trusted aide to former Chief Executive Donald Tsang, who made him the head of the civil service and Hong Kong's No.2 official, after he was elected in 2005.

The veteran civil servant was secretary for financial services from 1995 to 2000, and even worked briefly with the Independent Commission Against Corruption's graft-busters in the 1970s.

Hui has been described as the "mastermind" behind Thomas and Raymond and their mother's efforts to take control of the family's business empire - something both SHKP and Hui have denied.

According to reports, he used to lead a lavish lifestyle, spending on race horses, and travelling to Europe and Japan for concerts. A big music fan, he spent at least HK$2 million on classical music records and converted most of a three-bedroom apartment to store the collection, according to Bloomberg News. Hui, who reportedly spent as much as HK$200,000 in a single day buying albums, had a vast collection of some 11,000 discs – mainly vinyl LPs – that included classical music albums, jazz and blues records, as well as Beatles albums from the 1960s, said the Post. He gave up his entire music library after he was declared a bankrupt last year.

Hui is married for more than 40 years with no children. There were rumours that he kept a mistress in Shanghai. His wife was never seen accompanying him to court throughout the trial, not even on the last day, said the Post.

Source: AFP, Reuters, South China Morning Post, Bloomberg News