Mak Chai-kwong (second left), former development secretary, shakes hands with Tsang King-man (second right), former assistant highways director, outside the Court of Final Appeal on Wednesday. The court has cleared Mak and Tsang of convictions over a rental allowance scam. Their suspended prison terms of eight months were also quashed. Provided to China Daily

Mak Chai-kwong and Tsang King-man finally cleared after drawn-out legal saga

The Court of Final Appeal (CFA) on Wednesday overturned a fraud conviction against two top government officials for cross-leasing their flats in order to siphon off HK$570,000 in government accommodation allowances back in the 1980s.

Former secretary for development Mak Chai-kwong and former assistant director of Highways Department Tsang King-man were accused of conspiracy to defraud the government in abusing the Private Tenancy Allowance, a benefit for civil servants to claim for rents paid for private flats.

Prosecutor Peter Duncan argued that all the evidence led to one and only one explanation - the pair were cross-holding the flats. Otherwise why would they have used such misleading forms to set the cross-leasing terms, he asked - which under the current law is still legal.

But the CFA questioned the premise, arguing there was no clear evidence to support such an allegation. The pair subsequently authorized each other to sell the two flats after they stopped receiving the allowance. If the two were cross-holding the flats, why would they need to settle the sales by trust agreements, the five-strong panel of judges questioned.

Both were previously found guilty of conspiracy to defraud the government between 1985 and 1990 when the two struck a deal to rent each other's flats to claim the accommodation allowance. In June 2013 the pair were sentenced to 8 months in jail, suspended for two years, by Judge Johnny Chan Jong-herng of the District Court.

At the Court of Appeal, judges agreed the original judge had erred in ruling that the payment for the flat owned by Mak had actually been extended by Tsang and vice versa. But the Court of Appeal upheld the conviction.

"I am very happy today that we can put aside the thing (that has been going on) for the past three and a half years now. I think we have a sunny sky today," Mak said while leaving the court.

The CFA will hand down a written judgment later. The top court also ordered the Department of Justice to pay all the legal costs for Mak and Tsang since the District Court case.

stushadow@chinadailyhk.com

(HK Edition 01/07/2016 page7)