Prominent construction engineering businessman Jason Poon Chuk-Hung, known for his vocal online criticism of the industry, has been arrested on suspicion of fraudulently obtaining a HK$6 million government-backed pandemic relief loan.

The arrest and allegations

Poon, his wife, and four of their employees were arrested last Wednesday (March 18) by the Kowloon West Regional Crime Unit for "conspiracy to defraud" and "money laundering." 

The investigation centers on a loan application made in June 2021 by Lockill Biochemical Limited, a company under Poon's name that produced surgical masks during the COVID-19 pandemic.

Authorities allege that the company submitted falsified sales figures and exaggerated rent and salary records to qualify for the " Special 100% Loan Guarantee" scheme.

This government program was established to help struggling small and medium-sized enterprises (SMEs) cover operational costs during the economic downturn caused by the pandemic.

It is believed that by inflating these figures, the company successfully deceived a bank into granting the maximum loan amount of HK$6 million.

Misuse of public funds

According to sources familiar with the case, after the loan was approved, the funds were allegedly diverted from their intended purpose. Instead of being used to pay for the company's rent and employee salaries as stipulated by the loan agreement, a large portion of the money was reportedly used for personal spending and to settle outstanding debts.

The HK$6 million loan was reportedly never repaid. Under the terms of the government guarantee scheme, if a bank is unable to recover the debt through legal means, the Hong Kong government—and by extension, the taxpayers—must ultimately cover the loss.

After an initial 12-month interest-only period, the company allegedly began defaulting on its payments, eventually ceasing all payments, including late fees, by mid-2023.  Lockill Biochemical Limited was later hit with a winding-up petition from a creditor and was ordered by the court to be liquidated in February 2024.

A pattern of controversy

Sources within the construction industry suggest a growing trend of individuals using a guise of "righteousness" to attack competitors for personal gain. 

These figures often leverage public concern over issues like bid-rigging and shoddy construction work to build an online following, only to provide misleading information that damages rivals.

Poon has cultivated a public persona as an industry expert and whistleblower, frequently commenting on high-profile construction issues online. However, industry insiders have long questioned the accuracy of his claims and his true motives.

Poon's arrest brings his extensive history of financial and legal troubles into sharp focus. A previous construction company he ran was forced into liquidation in 2020 due to mounting debts. 

Since then, he has reportedly been pursued by debt collection agencies, who have posted public notices seeking repayment.

His legal battles are numerous. In 2023, he and his wife were sued for over HK$19 million related to an unpaid property mortgage, ultimately surrendering the property.

He has also been taken to court by former associates, including a former assistant and Tai Po District Councillor Mui Ching-hung, over separate claims of unpaid wages and unresolved contract payments, narrowly avoiding a personal bankruptcy order earlier this year by making a last-minute payment.

His outspoken online presence has also led to multiple defamation lawsuits. 

Furthermore, he was sentenced to 21 days in jail for contempt of court after failing to comply with a court order to remove defamatory posts about his former assistant; that case is pending appeal. 

He faces sentencing on March 25 in a separate contempt of court case for publishing court transcripts and attacking a judge online. 

Adding to his legal woes, he is scheduled to stand trial on March 27 on two counts of common assault following a dispute over a leaking air conditioner at his retail store last year.