Former Chief Secretary and property tycoon lose appeal in Hong Kong's highest profile corruption case

The convictions of former Chief Secretary of Hong Kong, Rafael Hui, former Sun Hung Kai chairman, Thomas Kwok, and two others have been upheld by Hong Kong's Court of Final Appeal. The appellants have resumed serving their sentences for conspiracy to commit misconduct in public office.

In a case that has occupied the legal, political and business community, the judgment provides important clarification on the scope of the common law offence, in particular what is required for conspiracy to commit misconduct in public office. The judgment confirms the well-established principle that benefits offered to develop or retain goodwill may fall foul of Hong Kong’s bribery laws.

The appellants sought to appeal the technical elements required to establish conspiracy and also argued that no specific advantage was received in return for payments they made to Hui. The Court of Final Appeal, in a unanimous judgment delivered by Chief Justice Ma, held that:

1. it was not necessary for the prosecution to show that the conspirators agreed or intended that Hui would commit a specific act of serious misconduct; and
2. Hui’s goodwill had been brought through the sweetening process, leaving Hui vulnerable to corrupt demands.

The case highlights the importance of disclosures of interest and also the fact that no "quid pro quo" is required to establish bribery under Hong Kong law. Business people should take this on board, particularly in their dealings with public figures.

Background

The appellants knew one another and had worked together at various stages in their careers. Immediately before taking office as Chief Secretary of Hong Kong, payments totalling HK$ 8.5 million were made to Hui's bank account on the instruction of Kwok but through the other two appellants. These payments were never disclosed. The prosecution alleged that these payments were bribes in order to keep Hui favourably disposed to Kwok in particular and his business interests during Hui's tenure as Chief Secretary.

The case spans several years, with the convictions at trial dating back to December 2014 and the Court of Appeal's dismissal of the appellants' appeals in February 2016. See our earlier updates covering those judgments here.

Issues before the Court of Final Appeal

In essence the appellants' case was that there was no evidence of actual misconduct; merely a perceived state of mind on the part of Hui in light of the surrounding facts. This, without more, was not sufficient to establish guilt.

The Court considered the ambit of misconduct in public office and bribery in Hong Kong. The Court confirmed that corruption under the offences in question had at its root the tendency to improperly influence, partnered with abuse of public trust by the official.

The alleged conspiratorial agreement was the HK$8.5 million payment which was said to be in return for Hui's favourable disposition while Chief Secretary. The Court found that this bargain was clearly corrupt, its purpose being that Hui would be inclined to show favour to the other conspirators’ interests. The Court ruled that Hui's independence in office would be "hopelessly compromised and he could not properly discharge his duties nor be trusted to do so" (para 96). This was, in the Court's view, a "serious abuse of office and public trust" (para 98).

Enforcement environment

In February 2017, Hong Kong’s former chief executive, Donald Tsang, was sentenced to 20 months in prison for misconduct in office in a separate case. These cases highlight the resolve of the ICAC, Hong Kong's anti-corruption authority, to investigate, and the Department of Justice, to prosecute, misconduct and bribery at the highest levels within the political and business elite.

If you wish to discuss, please contact Kyle Wombolt, Robert Hunt, or Christine Cuthbert of the Corporate Crime and Investigations team or your usual Herbert Smith Freehills contact.