Date
11 December 2018
Democratic Party lawmaker Ted Hui (inset, extreme left) stands outside an ICAC office after filing a complaint against PMQ in relation to the arts and design center’s handling of rent arrears. Photos: Xinhua, Ted Hui
Democratic Party lawmaker Ted Hui (inset, extreme left) stands outside an ICAC office after filing a complaint against PMQ in relation to the arts and design center’s handling of rent arrears. Photos: Xinhua, Ted Hui

PMQ faces ICAC scrutiny over rent arrears write-off

PMQ, the iconic arts and design hub that caters to the creative community, may face a probe from Hong Kong’s anti-graft agency following allegations that it wrote off rent arrears of several tenants in an improper manner. 

On Thursday, several Democratic Party members on the Central and Western District Council, including Cheng Lai-king, Ng Siu-hong and Ted Hui Chi-fung, filed a complaint with the Independent Commission Against Corruption (ICAC) on suspected accounting misconduct by PMQ, the Hong Kong Economic Journal reports.

Referring to PMQ writing off rent arrears, the district council members claimed a case has arisen where there may have been improper transfer of benefits to some parties. 

After getting the complaint, the ICAC said it will deal with the matter according to established procedures.

Following media revelations last month that the board of the four-year-old PMQ decided to treat more than HK$10 million of rents unpaid by several of its tenants as bad debts and subsequently wrote off the amount, a work group of the Central and Western District Council held a meeting on Wednesday to follow up on the issue.

Representatives from the Development Bureau and PMQ who attended the meeting admitted there were indeed rent arrears worth as much as the reported amount, involving several tenants, written off.

As a creativity landmark that officially opened in June 2014, PMQ is located at the former Police Married Quarters on Hollywood Road in Central. Its operating right was awarded to PMQ Management Co. Ltd., a non-profit-making social enterprise set up by the Musketeers Education and Culture Charitable Foundation Ltd. PMQ only pays the government a nominal rent of HK$1 per annum.

While shop rents are its main source of revenue, PMQ has not recorded any profit so far since its establishment.

According to Hui, who is also an incumbent member of the Legislative Council, PMQ had promised in an agreement signed with the government to transfer to the Treasury half of its profits, if any, made in the first five years after launch of operations.

As such, writing off rent arrears would definitely affect PMQ’s profits as well as the Treasury’s income, which impairs the public interest, said Hui, who also criticized the Development Bureau for ineffective monitoring.

In its defense, the bureau said that it reviewed the center’s financial reports regularly and knew that it was seeking payments from the tenants falling into arrears.

PMQ stressed it has established internal procedures to handle individual cases in which the tenants were found to have breached the tenancy terms, and that it treats all tenants equally.

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TL/JC/RC

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