The wife of former chief executive Donald Tsang Yam-kuen received HK$350,000 from banker David Li Kwok-po as part of the payment to renovate a luxury flat in Shenzhen, a court has heard.
The prosecution made the allegation during a hearing of the misconduct and corruption charges filed against Tsang before the Court of First Instance on Tuesday, the Hong Kong Economic Journal reports.
Tsang has pleaded not guilty to the charges.
The former Hong Kong leader is accused of accepting a posh three-storey flat at the Donghai Garden in Shenzhen for his retirement in exchange for granting a digital broadcasting license to Wave Media businessman Bill Wong Cho-bau for 2010 to 2012, the report said.
In his opening statement, prosecution lawyer David Perry said Tsang used his position as chief executive and head of the Executive Council to approve three requests from Wave Media, later renamed Digital Broadcasting Corp., after reaching an agreement regarding the Shenzhen flat, in which Wong allegedly offered to pay for all the renovation and design costs.
Perry said this was a classic case of conflict of interest in which Tsang “hopelessly compromised” and “betrayed” the public trust in the government.
The prosecution revealed that on Nov. 5, 2010, after Wave Media’s license was granted, Tsang and his wife Selina spent a weekend in the mainland with Wong and another major shareholder of the company, David Li, who is also the chairman and chief executive of the Bank of East Asia (00023.HK).
Li allegedly gave Tsang’s wife a cheque for HK$350,000 in July 2010 as payment for the architect’s design fees for the Shenzhen apartment.
On July 16, 2010, Tsang’s wife went to encash the cheque at the BEA headquarters in Central.
The Independent Commission Against Corruption had retrieved reports about the case, including a receipt for 800,000 yuan (US$115,510) paid by Tsang to Wong’s company as rent for the Shenzhen flat, the court heard.
Shenzhen Donghai Group Company Ltd. and East Pacific (Holdings) Ltd., of which Wong was director and shareholder, respectively, were responsible for paying for the renovation of the apartment, the prosecution said.
The 6,700 square foot house in Shenzhen was renovated for over HK$3 million, with architect Barrie Ho receiving HK$350,000 in two installments as design fees.
The first payment of HK$175,000 to Ho was made in March 2011, or a week before the Executive Council approved the granting of digital broadcasting license to Wave Media.
The prosecution believed that after it was reported in February 2012 that Tsang had meetings with Ho, he attempted to manipulate the information by saying in a radio program that he intended to rent the Shenzhen flat as a retirement home.
The prosecution also said that given Tsang’s long experience in politics, it was not possible that he had not realized that there was a conflict of interest in his dealings with Wong.
Tsang is also accused of concealing his relationship with Ho, whom he nominated to receive a Medal of Honor from the government in October 2011.
The prosecution said Tsang and his wife met with Ho almost every month before and during the renovation of the Shenzhen flat, but he never disclosed his relationship with the architect when he nominated him for the Medal of Honor.
In at least three of those occasions, Tsang’s wife and Ho visited the Shenzhen flat to inspect the progress of the renovation, the court heard.
After the media exposed the Tsangs’ meetings with Ho, the couple stopped seeing the architect and the renovation project was discontinued.
The hearing continues on Wednesday.
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