Call for amnesty over flat leasing

The ruling in the rental fraud case of former development minister Mak Chai-kwong has brought some measure of reassurance to civil servants who in the past claimed housing allowance while cross-leasing their flats.

But their union wants the government to go further and grant amnesty for those who participated in the scheme, to put some "anxious" senior civil servants' minds at ease.

In his ruling, District Judge Johnny Chan Jong-herng yesterday accepted testimony by former secretary for civil service Joseph Wong Wing-ping that cross-leasing in itself was not seen as illegal.

Under the Civil Service Bureau's scheme, employees could obtain rent subsidies even if they were living in a flat they had cross-leased from another employee. They would use the rental income to pay the mortgage on a separate flat they had bought. The scheme was widely viewed at the time as having many loopholes and was stopped in 1990.

"While I accept the evidence of Mr Joseph Wong that cross-leasing by civil servants has never been illegal and civil servants who cross-leased would not discuss it openly, I see no reason why Mak and Tsang should take positive steps to conceal their identities as co-owners and used only their wives as landlords in the leases," Chan said.

He found Mak and assistant highways director Tsang King-man guilty of defrauding the government of HK$700,000 in housing allowances using two properties in which they had a financial interest. They leased them to each other in the names of their wives, concealing their financial interests.