7 November, 2017
A jury has failed to reach a verdict in relation to a bribery charge against the former Chief Executive of Hong Kong, Donald Tsang Yam-kuen. On Friday 3 November, after 14 hours of deliberation, the jury advised the court that it was unable to reach a verdict and was dismissed. This is the second time a jury has been unable to reach a verdict on this charge. In February, Mr Tsang was convicted of misconduct in public office but the jury was hung on the concurrent bribery charge and a retrial was ordered. Yesterday, the prosecution indicated that the Department of Justice is not intending to seek a second retrial.
The bribery charge
Section 4 of the Prevention of Bribery Ordinance makes it unlawful for the Chief Executive and other public servants to accept an "advantage" as an inducement or reward for performing acts or favouring a particular person. In the case of Mr Tsang, the allegation of bribery related to:
1 an arrangement between Mr Tsang and a shareholder of Wave Media Limited (later known as Digital Broadcasting Corporation Hong Kong Limited) to supply and renovate a luxury Shenzhen apartment which was to be used by Mr Tsang when he retired; and
2 the granting of several applications to Wave Media Limited by Mr Tsang as Chief Executive in 2011.
Applying established law, the prosecution also relied on the argument that Mr Tsang had become "favourably disposed" to Wave Media Limited as a result of (1). As such, it was not necessary to find a causal link (or quid pro quo) between (1) and (2).The judge endorsed this argument in his directions to the jury.
1 The Shenzhen apartment
The refurbished apartment was a former clubhouse owned by Mr Bill Wong Cho-bau, a Chinese property developer who was also a shareholder of Wave Media Limited. The precise nature of the arrangement relating to the apartment was contentious at trial.
The prosecution's position was that Mr Tsang had been effectively "gifted" the property to "keep him sweet" towards Wave Media Limited. The prosecution further alleged that later documents supporting the arrangement (a lease agreement, receipts etc) were forgeries.
The defence's position was that Mr Tsang entered into a bona fide agreement whereby he would lease the property from Mr Wong for two years starting when he retired. The defence asserted that in 2010, Mr Tsang pre-paid rent of HK$800,000 to facilitate the renovation.
2 The licence applications
In 2011, Mr Tsang as the Chief Executive in Council granted a number of applications in favour of Wave Media Limited. The main application was for a digital broadcasting licence, a form of broadcasting that had previously had only limited use in Hong Kong.
At the same time, two other companies, Metro Broadcast Corporation Limited, Phoenix U Radio Limited (being the only other applicants), were also granted a broadcasting licence.
Each of the three applications were approved and given recommendations by the Communications Authority and the Civil Engineering and Development Department. However the ultimate decision to approve the decision was held by the Chief Executive in Council – being Mr Tsang.
When granting the applications Mr Tsang did not disclose his connection to Wave Media Limited's shareholders. The defence argued that Mr Tsang's failure to disclose was an oversight on his part rather than a deliberate attempt to conceal anything untoward.
The outcome
The day before the jury began deliberation, a juror was dismissed, meaning that the 9 person jury was reduced to 8 and a 6-2 majority was necessary. The jury was once again unable reach a majority verdict.
The judge considered follow up matters yesterday, with the prosecution leaving the charge with the court, indicating that the Department of Justice will not seek a retrial.
Comment
Regarding the impact of this case, the outcome does not materially change the ambit of Hong Kong's bribery laws. The well-established principle that benefits offered to develop or retain goodwill may fall foul of Hong Kong’s bribery laws (endorsed recently by the Court of Final Appeal in another high profile case) remains good law. From the present case, we can conclude that although it is not necessary for the prosecution to show an agreement that a specific act will be performed, it is necessary to show an advantage has been conferred and that the recipient has been "sweetened" as a result leaving him/her vulnerable to corrupt demands.
For further information, please contact:
Kyle Wombolt, Partner, Herbert Smith Freehills
kyle.wombolt@hsf.com
