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Rafael Hui is escorted from the High Court by a Correctional Services staff member after being convicted on bribery charges. Photo: AP
Former Hong Kong chief secretary Rafael Hui Si-yan was convicted on Friday of bribery amounting to HK$19.68 million, part of the money involving property tycoon Thomas Kwok Ping-kwong. The verdict brought an end to a long trial that exposed close ties between the government and business elite.
After a five-day deliberation, the High Court jury found Hui guilty of five out of eight counts of charges spanning bribery and misconduct in public office.
Among his crimes was accepting an HK$8.5 million bribe in 2005 before he became chief secretary, and failing to disclose this payment.
Among the four other defendants, Raymond Kwok Ping-luen, the 61-year-old brother of Thomas and co-chair of Sun Hung Kai Properties (SHKP), was acquitted of all four counts of bribery and furnishing false information.
An SHKP spokesman said the company would release a statement by around 6 or 7pm.
Rafael Hui (left) and Thomas Kwok at court this morning to hear the verdicts.
Thomas Kwok Ping-kwong was found guilty of one of three charges involving the HK$8.5 million bribe in 2005, but was cleared of the conspiracy to commit misconduct in public office owing to a HK$5 million payment to Hui in 2005 and another HK$11.182 million in 2007.
The decision is seen as an unprecedented victory for the anti-corruption watchdog, putting into question the level of probity of the city’s public governance.
Speaking outside court at around 4.40pm, Raymond Kwok said he felt mixed emotions. "On the one hand I feel happy for the verdict ... for proving my innocence," he said. "On the other hand the verdicts of Thomas Kwok and Thomas Chan - I'm unhappy. We will continue to support Thomas Kwok and his family.
Raymond Kwok thanked his wife, children and other people who supported him, along with his colleagues.
Kwok, a Christian, added: "Jesus Christ gives me beliefs and hope and makes me feel calm."
The conviction of Thomas Kwok also prompts speculation about a management reshuffle at SHKP, Hong Kong’s biggest developer by market value.
After the verdicts, prosecutors asked the judge to consider a disqualification order to expel Thomas Kwok and Thomas Chan from the director’s post of SHKP.
SHKP boss Raymond Kwok was acquitted of all four counts.
The company and its subsidiaries – SmarTone Telecommunications and Sunevision – suspended trading at 2:45pm, pending a statement containing inside information, according to company statements on the Hong Kong stock exchange website.
During the trial, the prosecution alleged that Hui was bribed to be the property empire’s “eyes and ears” in government.
Hui allegedly took the HK$5 million from Thomas Kwok; HK$4.125 million from Raymond Kwok in 2005, shortly before he became chief secretary; and HK$8.5 million from the Kwok brothers, via alleged bagmen – co-defendants SHKP executive director Thomas Chan Kui-yuen and ex-stock exchange official Francis Kwan Hung-sang.
Prior to his post as Hong Kong’s number 2, Hui was managing director of the Mandatory Provident Fund Schemes Authority and failed to disclose his consultancy contract with SHKP as well as his rent-free luxury lodgings at Leighton Hill between 2000 to 2003. He also received a loan from an SHKP subsidiary around this time.
Hui was accused of failing to declare to government a HK$3 million loan and an extension he obtained from Honour Finance, a SHKP subsidiary, while he was chief secretary.
From 2007 onwards, after he stepped down as chief secretary and remained a non-official member of the Executive Council, Hui received a total of HK$11.182 million from the Kwoks through the two bagmen, also said to be bribes. Hui also stood accused of failing to make a declaration of the payment to the government.
For these, Hui was found guilty of one count of conspiring to offer advantage to public servants and one count of misconduct, respectively.
Thomas Chan, one of two men who helped facilitate Thomas Kwok’s money transfers to Hui, was convicted on two counts related to bribing a public official.
Hui was cleared of three counts, including conspiracy to commit misconduct for the HK$5 million payment, a charge for which Thomas Kwok was also acquitted.
Hui and Raymond Kwok were not guilty of two separate counts of furnishing false information and one of conspiracy to offer an advantage to a public servant over the HK$4.125 million payment in 2005.
For the HK$4.125 million sum, the prosecution accused Hui and Raymond Kwok for furnishing false information by stating the sum as a bonus on an invoice.
The men who helped facilitate Thomas Kwok’s money transfers to Hui – Chan, whom the prosecutor described as a loyal employee of SHKP for 40 years, and Kwan, a close friend of Hui since childhood – were guilty on two charges related to bribing a public servant.
All except Raymond Kwok were remanded in custody until Monday’s hearing for mitigation.
Raymond Kwok looked glum and appeared hesitant to leave the courtroom on Friday, asking the dock guard if he really could go. He held a hand to his head as he left, leaving the others at the dock.
Re: Rafael Hui and Thomas Kwok found guilty of bribery in Hong Kong’s biggest graft t
How bribe-taker Rafael Hui’s taste for the high life led to his fall from grace
Former Hong Kong chief secretary splurged HK$2 million in one music store over a few years
Rafael Hui arrives at court on the day he is found guilty of misconduct in public office. Photo: Felix Wong/SCMP
When he became Hong Kong’s No 2 man in 2005, Rafael Hui Si-yan quipped it was a “nightmare” he had never imagined would befall him. That, however, did not stop the veteran civil servant nicknamed the “king of strategies” – for his political acumen – from turning the appointment into a lucrative dream.
The real nightmare unfolded much later. Hui cut a forlorn figure as he sat in the dock at the Court of First Instance on Friday as the verdict of guilty was handed to him by a jury of nine lay men and women after a 130-day high-profile trial.
Bribe-taker Hui, 66, makes history as the most senior government official ever to be convicted in Hong Kong, in its 150 years as a British colony and its decade-plus years as a special administrative region of China.
He was found guilty of accepting HK$8.5million in bribes from Sun Hung Kai Properties co-chairman, Thomas Kwok, in return for him to be “favourably disposed to the developer”. He was also found guilty of four charges of misconduct in public office and one charge of conspiracy to offer an advantage to public servant.
It was as though Hui had prophesied his own downfall when, at the start of his tenure as chief secretary of high political office on June 30, 2005, he joked to journalists: “In all my nightmares, I never dreamt that I would be sitting here.”
Just a few hours before that, he had accepted a bribe of HK$8.5 million from Thomas Kwok Ping-kwong, now Sun Hung Kai Properties co-chairman. At the media conference, he claimed to have earned less than HK$10 million a year as SHKP consultant, when in fact, as he admitted in court, Thomas Kwok had guaranteed him HK$15 million.
This was a man who would go on to be feted with the city’s top honour, the Grand Bauhinia Medal; to be appointed to the Standing Committee of the Chinese People’s Political Consultative Conference, the mainland’s top advisory body; and to be one of 1,193 members on the Election Committee, in a city of seven million, that selected Chief Executive Leung Chun-ying in 2012.
Hui could have avoided being ensnared in the corruption scandal had he not stepped back into government after a five-year hiatus to help an old friend, Donald Tsang Yam-kuen, take over then beleaguered chief executive Tung Chee-hwa.
But being the acclaimed bureaucrat and master troubleshooter who could “spin” any issue in the government’s favour, Hui agreed to come on board as Tsang’s most trusted aide.
That meant giving up a fat paycheck continuing as a consultant to property giant SHKP. But Beijing’s unexpected willingness to endorse a colonial-era official for the city’s top job was, as he recalled in court, a coup of sorts for Tsang.
“It was surprisingly good that the state would appoint him as chief executive,” Hui testified. “So I felt I had to help him.”
In Tsang’s own words, his low-profile right-hand man was a person he could work well with and he had the seniority to lead the governing team.
Fresh in his role, Hui was the third-most popular member of Tsang’s cabinet according to the University of Hong Kong’s monthly rankings, despite misgivings that his previous business dealings with developers would affect his work in the West Kowloon Cultural District project.
But lead prosecutor David Perry QC said the man – who admitted accepting HK$30.8 million in cash and the rent-free use of two luxury Happy Valley flats from Thomas Kwok and fellow SHKP co-chairman Raymond Kwok Ping-luen, and took out loans totalling HK$5.4 million, part of which he repaid only the interest – “cannot be trusted”.
“Something is rotten at the heart of the government,” Perry said.
By then leading a lavish lifestyle, Hui was “vulnerable to exploitation by those who are willing to buy his services, as a member of the government”, said the QC.
It was a blight on the “distinguished” civil service career Perry said Hui had charted – including a spell in an administrative post with the Independent Commission Against Corruption – at least up to 2000, by which time he was financial services secretary. He left the troubled Tung team to become managing director of the Mandatory Provident Fund Schemes Authority, before joining SHKP in March 2004.
Hui began his climb through the civil service ranks in 1971 as a junior education officer, fresh after graduation from the University of Hong Kong.
In the 1990s, he oversaw the construction of Chek Lap Kok airport amid much wrangling between the British colonial masters and Beijing.
But it was his tenure as financial services chief – beginning before the 1997 handover and continuing throughout the Asian financial crisis in 1998 – that left an indelible mark on the governance of Hong Kong. Hui was among the first to urge his boss Tsang, then financial secretary, to fend off speculators attacking the city’s currency peg. He also worked with Monetary Authority chief executive Joseph Yam Chi-kwong to pump HK$118 billion into the markets.
Recalling the turbulent time, Hui told the court what a “difficult” decision it was for the government to adopt policies that departed from the general philosophy of non-intervention.
Hui’s reform efforts in the wake of the economic turmoil earned him acclaim as the best policy secretary of his day.
But one of his last achievements in government proved controversial. Having steered the creation of the MPF, to provide a retirement nest egg for three million workers he then decided to lead the authority overseeing the fund – a HK$4-million-a-year job that some sneered he tailor-made for himself.
When did money begin to wield an overpowering grip on his life? One can only guess. As chief secretary, it was clear Hui was already seduced by the high life. An avid traveller to Japan and Europe for exclusive opera performances, he once chalked up a HK$150,500 bill for a stay at London’s Dorchester Hotel. As a music buff, he splurged more than HK$2 million in one music store over a few years, and HK$200,000 on CDs and vinyl records in a single day in 2007. His annual income then: HK$4.6 million.
In court, he spared no effort to wax lyrical over his fine tastes, even proffering impromptu tutorials to the trial judge, Mr Justice Andrew Macrae, who appeared lost in the appreciation of new and old vinyl records.
Hui resigned as chief secretary after a two-year stint because his average monthly salary of HK$300,000 could not cover his lavish expenses, he told the court. Back then, even a private plea from Liao Hui , then the top Beijing official at the Hong Kong and Macau Affairs Office, failed to keep him in the job.
Following Tsang’s 2007 re-election as chief executive, Hui continued to play a role in the administration only as a non-official Executive Council member.
But as his government income fell by two-thirds, to HK$105,000 Hui was withdrawing well over HK$1 million a month, using overdraft facilities. He also settled his taxes using bank loans.
“Basically, I did not have any savings. I spent almost everything I had.”
The man Tung sought twice in vain to appoint as the city’s financial secretary said he never made any investment and settled credit card bills by paying the minimum charge.
The writing was on the wall when the ICAC pressed charges of bribery and public misconduct against Hui in July 2012. Creditors came knocking on his door, including Hang Seng Bank, Standard Chartered Bank and, interestingly, Honour Finance, a subsidiary of SHKP.
Hui was eventually declared bankrupt in November last year for failing to repay the Bank of East Asia unspecified sums due under two overdraft facilities and two credit cards. Media reports suggested his debts had piled up to almost HK$75 million, including an unconfirmed HK$60 million owed to BEA.
The flashy details of his high life exposed in court betrayed little of an earlier life of innocence.
As a schoolboy, he wrote an essay condemning James Bond books as pornographic because of the fictional spy’s penchant for casual sex.
But in his later adult years, he succumbed to that too.
“In 2008, I gave some money to a female friend in Shanghai,” he confessed in court. “I do not recall the exact amount – but I think at least HK$7 million or HK$8 million … some of which for purchasing properties, some for investments.”
Married for more than 40 years with no children, Hui said: “If you ask me if there’s someone of a similar nature [to the Shanghai woman’s] – there is not.”
His modest wife, Teresa, was never seen accompanying him to court throughout the trial, not even on the last day.
Former Chief Secretary Rafael Hui Si-yan appears at Hong Kong's High Court on December 17, 2014. Photo: Nora Tam
Life and career
1948 Born in Macau to an influential family. Educated at Queen’s College and University of Hong Kong
1970 Government assistant education officer
1971 Joins administrative service
1974 Marries Teresa Lo
1977 Seconded to Independent Commission Against Corruption
1978 Secretary on inquiry committee looking into closure of Precious Blood Golden Jubilee Secondary School
1983 Earns master’s in public administration from Harvard University
1986 Secretary general of Office of the Unofficial Members of the Executive and Legislative Councils
1991 Director of New Airport Project Coordination Office
1992 Commissioner of transport
1996 Secretary for financial services
1998 Intervenes in stock market amid Asian financial crisis
2000 Quits government to head Mandatory Provident Fund Schemes Authority. Borrows unsecured loan of HK$900,000 from SHKP subsidiary Honour Finance
2001 Turns down chief executive Tung Chee-hwa’s invitation to be financial secretary. Secures HK$1.5 million tax loan from Honour Finance. Renews MPFA lease at Central’s One IFC, which SHKP co-owns. Wife Teresa starts to discuss with interior designers layouts of deluxe flats 20A and 20B in Tower 6 of Sun Hung Kai Properties development The Leighton Hill in Happy Valley
2002 Elected as Jockey Club steward
2002-03 Negotiates SHKP consultancy contract. Honour Finance loan of HK$900,000 still outstanding
February 2003 Submits resignation to MPFA and moves into both flats without making any rental agreement
August 2003 Leaves MPFA
October 2003 Accepts cash cheque of HK$3 million from SHKP’s Thomas Kwok
March 2004 Becomes SHKP consultant. Turns down position of financial minister again
2004 Joins KMB board of directors. Part of Hong Kong’s National Day delegation to Beijing
March-April 2005 Accepts cash cheque of HK$5 million from Kwok. Receives unsecured Honour Finance loan of HK$3 million
April 2005 Resigns from SHKP. Becomes chief strategist in Donald Tsang Yam-kuen’s chief executive campaign. Receives HK$4.125 million from SHKP for remainder of contract between April 2005 and February 2006. SHKP arranges lease contract for Hui to continue living at Leighton Hill at HK$160,000 per month.
May-June 2005 SHKP executive director Thomas Chan Kui-yuen gives Hui’s friend Francis Kwan Hung-sang HK$10.5 million, HK$8.5 million of which Kwan transfers to Hui in separate transactions while keeping HK$2 million. Hui also takes HK$3 million from former nightclub owner Law Cheuk
June 30, 2005 Appointed chief secretary. Oversees government projects of Ma Wan and West Kowloon Cultural District, both involving SHKP
July 2007 Steps down as chief secretary while staying on at Executive Council as non-official member
2007 Chan gives Kwan, via overseas companies, HK$11.182 million. Kwan keeps about HK$1 million and passes the rest to Hui
January 2009 Hui quits Exco
March 2012 Hui and others arrested by ICAC. Charged in July
November 2013 Declared bankrupt in High Court
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Trial timeline
May 8, 2014 Five defendants in the most high-profile graft case in Hong Kong’s history deny all bribery allegations as the hearing starts. The five include former chief secretary Rafael Hui Si-yan, Sun Hung Kai Properties co-chairmen brothers Thomas Kwok Ping-kwong and Raymond Kwok Ping-luen, SHKP executive director Thomas Chan Kui-yuen and former stock exchange senior executive Francis Kwan Hung-sang, who is a childhood friend of Hui. Hui is accused of receiving HK$34 million in cash, loans and other inducements between 2000 and 2009 from Kwok’s brothers via money transfer between Thomas Chan and Kwan.
May 28 Mr Justice Andrew Macrae discharges jury barely an hour into the hearing due to the exit of a juror who prompted by the exit of a juror who complains of illness. A second jury, including six women and three men, is empanelled on June 4, 2014. The jury is selected from more than 150 candidates. Many offer various excuses to avoid the duty, for reasons including poor health, planning a funeral, caring for a newborn, a wedding and honeymoon and attending the soccer World Cup in Brazil. Several say they have planned trips to South Korea, including one woman going there to meet “a handsome man” who acted in the science fiction series My Love from the Star. Macrae jokes: “It looks like the court will have to move to Korea.”
June 5 Lead prosecutor David Perry QC begins his opening remarks, which last for four days. The speech unveiled In them, he reveals the allegation of how the Kwok brothers paid millions of dollars to Hui, via complicated fund transfers between Chan and Kwan, to act as their “inside man” and as “eyes and ears” in the government for the developer SHKP. It also unveiled reveals that Hui lived an “extravagant” and “lavish” lifestyle that costs him up to 10 times his income.
June 12 First witness, Exco clerk Kinnie Wong Kit-yee talks about the importance of Exco members declaring their interests. From this time until September 5, more than 50 witness are called by the prosecutor to give evidence.
June 26 Raymond Chin Yuet-ming, Hui’s long-time friend, describes how he helped Hui transfer HK$3 million to women in Shanghai and Shenzhen between 2009 and 2010. He says he did not question Hui’s motive because he believed Hui would never engage in illegal activities.
July 23 The court hears that Hui’s wife discussed with a Sun Hung Kai Properties representative in 2001 how to fit out two luxury Happy Valley flats in The Leighton Hill development, built by the property giant. That allegedly happened when Hui was still a public servant to act as managing director of the Mandatory Provident Fund Schemes Authority from June 2000 to August 2003. In February 2003, before he left the government, Hui moved in with his wife at The Leighton Hill without paying rent, which the prosecutor alleges to be part of a bribe to Hui.
August 15 The court hears that a man named Law Cheuk was the mystery person who gave Hui HK$3 million to pay rent on his Happy Valley flats just before he became chief secretary in mid-2005.
August 18 The court hears that Raymond Kwok denied in 2012 that he knew of any illegal payment or bribe to former chief secretary Rafael Hui Si-yan. Prosecutors read out Kwok’s denial, in the form of a statement from his lawyer submitted to the director of public prosecutions when the ICAC arrested Kwok in March 2012. In it, Kwok told graft-busters that a sum of HK$4.125 million given to Hui as he was leaving SHKP’s employ as a consultant in 2005 was a special bonus the latter asked for. He said an SHKP executive had wrongly described the bonus as advance payment of Hui’s consultancy fees from April 2005 to February 2006, a “minor mistake” he said had “given a wrong impression that SHKP continued to pay Hui after he left the group”.
August 21 Perry cites bank documents to show how Hui’s debt shot up from HK$4 million to HK$57 million in a two-year period after he stepped down as chief secretary in 2007, with a taste for keeping horses, five-star hotel meals, trips abroad and nights out at opera – an expensive lifestyle that made him “an obvious target for exploitation”.
September 12-30 Hui’s defence testimony begins. He describes himself as a man who would “spend everything” in his pocket and pay only the minimum charges on his credit card bills. The music lover admits he spent HK$200,000 on records in a single day in 2007.
Highlights of Rafael Hui defence -
15 September Hui, who has been married since 1974, says he lavished millions on a young Shanghai woman after he and she started an “intimate” relationship in 2008, a liaison that lasted for two to three years.
19 September Hui admits he had evaded taxes on income totalling HK$21.8 million, earned from Thomas Kwok Ping-kwong of Sun Hung Kai Properties, in the years before and during his term as chief secretary.
23 September Hui reveals he received a secret HK$11 million payment “from Beijing” amid offers of help from top mainland official Liao Hui.
3 October to 16 October Thomas Kwok’s testimony begins. On his first day testifying he describes how he negotiated the release of his elder brother Walter Kwok Ping-sheung, who had been kidnapped in 1997 by the notorious gangster “Big Spender” Cheung Tsz-keung. Thomas Kwok says after his brother’s release Walter Kwok became paranoid, and disappointed his mother by keeping a mistress. Thomas Kwok says that in 2007, Walter Kwok was diagnosed with bipolar disorder, and that Thomas Kwok has since had a bad relationship with his brother.
20 October The 100th day of the trial. SHKP executive director Thomas Chan, testifying in his own defence, says that Raymond Kwok wrote in his diary in 2001 that Walter Kwok had “gone crazy”. The trail was originally scheduled to be 70 days to run until October.
19 December Verdicts delivered. Hui is found guilty of five counts of misconduct in public office and bribery.
