December 23, 2014 / 3:43 AM / in 3 years

Hong Kong property tycoon jailed for five years in graft case

Former Hong Kong Stock Exchange official Francis Kwan (L-R), Former Hong Kong's chief secretary Rafael Hui , former co-chairman of Sun Hung Kai Properties Thomas Kwok, and former executive director of Sun Hung Kai Properties Thomas Chan, sit in a prison van as they arrive at the High Court in Hong Kong December 23, 2014.Tyrone Siu

HONG KONG (Reuters) - The former co-chairman of Hong Kong-listed developer Sun Hung Kai Properties Ltd, Thomas Kwok, was sentenced to five years in jail and a HK$500,000 ($64,440) fine on Tuesday in the city's highest profile graft case.

Rafael Hui, a former top Hong Kong government official who headed the civil service from 2005 to 2007, was sentenced to seven and half years in jail for his role in the scandal.

Their trial exposed the cozy relationship between the city's powerful developers and government in the former British colony, with Sun Hung Kai paying Hui millions of dollars in bribes to gain government favor. The court ordered Hui to return HK$11.182 million in bribes to the Hong Kong government.

The case shocked Hong Kong's business community, a small, close-knit group of tycoon-led families who control much of the city's business and hold substantial political influence.

In handing down the sentences, Judge Andrew Macrae of the High Court said it was important for the Hong Kong government and business community to be "corruption free" as mainland China was determined to "eradicate the cancer of corruption".

"If not for this case, you would have probably gone down in history as one of the finest Chief Secretary in recent history," Macrae told Hui in the court.

Hui, 66, was found guilty on Friday of three counts of misconduct in public office and two counts of conspiracy to commit misconduct. He had faced eight charges related to bribery and misconduct in public office, all of which he denied.

Thomas Kwok, 63, was found guilty of one count of conspiracy to commit misconduct in public office. He had pleaded not guilty. His younger brother, Raymond Kwok, also co-chairman of the city's largest developer, was cleared of all charges in the case.

Sun Hung Kai executive Thomas Chan and businessman Francis Kwan, who were each found guilty of two charges of conspiracy to commit misconduct in public office and conspiracy to offer an advantage to a public servant, were sentenced to six years and five years in jail, respectively. Chan was fined HK$500,000.

Kwok and Chan will each pay HK$12.5 million in legal cost.

Thomas Kwok, who resigned as chairman and managing director after the verdicts were delivered, plans to appeal against his conviction, Sun Hung Kai said in a statement last Friday.

In a separate statement at the weekend, the Kwok's eldest brother, Walter Kwok, said he felt "deeply sorrowful that Thomas was convicted". Walter Kwok, who resigned as a director of the company in January, said he has no intention of rejoining.

Shares of Sun Hung Kai rose 1.3 percent by lunch break, extending a 2.2 percent gain on Monday after the corruption trial concluded, removing uncertainty that had clouded the developer's outlook for more than two years.

That outpaced a 0.15 percent gain in the benchmark Hang Seng Index. The stock has risen over 19 percent so far this year.

($1 = 7.7592 Hong Kong dollars)

(This story was refiled to fix typo in fifth paragraph)

Reporting by Lizzie Ko, Venus Wu, Twinnie Siu and Donny Kwok; Editing by Michael Perry

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