Friday, August 29, 2014   




Time to come clean on bundled deal

Mary Ma

Monday, July 09, 2012

The way development minister Mak Chai-kwong has been handling the scandal surrounding his civil service housing allowance couldn't be more ill-advised.

After the media broke the news that he cross-leased a North Point property with a colleague in the 1980s, Mak insisted there was nothing wrong in the arrangement - even though they lived in each other's flats and claimed the government rental allowance.

If they resided in their own premises, they would not have received the allowance.

But who was the fellow civil servant who cross-leased with him? Mak wouldn't say until the media exposed the other party as current assistant highways director Tsang King-man - his old university buddy. Technically, at this stage, neither can be fingered for breaching the regulations even if they do raise eyebrows.

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Unfortunately, this wasn't the whole story. What Mak stopped short of disclosing was that he and Tsang had also authorized each other to sell the flats they had rented from each other. It's weird since such an arrangement is usually made among family members, or if the owner is away from Hong Kong.

As a result, Tsang sold the unit he had rented from Mak for nearly HK$2.5 million in 1990 - about four years after Mak bought the flat for HK$925,800 from the developer.

Then in 1992, Mak sold the flat he had rented from Tsang for more than HK$4 million. It is stunning. Why had they entered into the reciprocal arrangements? The cross-authorization revealed by the media has not only deepened the housing mystery, but also raised new questions.

In law, there are legal owners and beneficial owners. A beneficial owner is also viewed as the actual owner. So the cross-authorization raises the question: while they were the legal owners, were they actually the beneficial owner of the flats they had rented and occupied?

It's clear in court precedents that civil servants can't claim rental allowance for living in premises owned by them or their family members. That is cheating.

Yesterday, Tsang broke his silence to insist there was no plot. But he refused to comment on the cross- authorization.

In the past week, Mak was quick to respond to questions regarding the co- leasing. But on the question of co- authorization, he also clammed up.

Perhaps Mak should know that the longer he stays silent on the unusual authorization question, the more damage he will do to the Leung Chun-ying administration - already reeling from a credibility crisis following the revelation of illegal structures at the homes of Leung and some of his senior officials. Mak said he would provide an explanation this week. But what will he say?

Unless he can clarify everything satisfactorily, the scandal will continue to spin in a dangerous direction, as the public will be tempted to consider it a legal matter rather than a political row.

It's imperative for Mak to come clean with a complete account of the matter, instead of in dribs and drabs.


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