HONG KONG (Reuters) - Joseph Lau, the flamboyant tycoon who heads developer Chinese Estates Holdings (0127.HK), will face prosecution over bribery and money laundering in a land deal in Asia’s gambling capital, Macau, the second high-profile corruption case involving a Hong Kong property company in two months.
Hong Kong’s clubby business community is already captivated by the arrests in late March of the billionaire Kwok brothers who run Asia’s largest developer, Sun Hung Kai Properties (0016.HK). Property professionals suggest the city’s business climate is changing, as citizens express anger over soaring property prices and tight ties between government and business.
A court in Macau, a former Portuguese colony, has formally accepted the public prosecutor’s allegation that Lau has a case to answer on bribery charges. It denied his request that the case be thrown out for lack of evidence. Lau faces prosecution and trial “in due course”, Chinese Estates said in a statement.
Lau, 61, is Hong Kong’s fifth-richest man, according to Forbes, worth $6.5 billion as of February. The former Goldman Sachs employee was one of the first people to buy a Boeing 787 Dreamliner for personal use. He’s also a serious collector of art and red wine, and has invested heavily in London property. The divorced tycoon’s love life is a staple of Hong Kong’s tabloids, with Lau linked to a string of former Miss Hong Kongs.
The prosecutor has alleged in court that Lau, chairman and CEO of Chinese Estates, and another high-profile tycoon, Steven Lo, chairman of the South China Football Club and movie-and-music entertainment group BMA Investment, offered a HK$20 million ($2.6 million) bribe to a former Macau government official. They allegedly did so to assure the purchase of five plots of land next to the Macau International Airport and near the Cotai Strip, a string of casinos.
Chinese Estates is building a multi-tower luxury development on the site, naming it La Scala, after the Milan opera house. Lo sold Chinese Estates the company, Full Moon, that owns the 78,000 square meters of land. The property brokerage Jones Lang LaSalle (JLL.N) put in the winning bid for Full Moon and says it is assisting with the investigation.
The official, Ao Man-long, was Macau’s secretary for transport and public works and the most senior government figure ever arrested by Macau’s anti-graft agency. He is already serving 28-1/2 years in jail for accepting bribes to speed approval of projects. The claims that Lau paid a bribe surfaced in a new trial, with Ao facing six fresh charges of bribery and three of money laundering.
Lau has denied any wrongdoing.[ID:nL6E8FHBJ1] He was called as a witness in Ao’s new trial but did not appear, while Lo testified and said he did not pay a bribe. Prosecutors say they found a cheque for HK$20 million that Lau signed with his brother, Thomas Lau, in Ao’s home, part of a paper trail linking the payment from Full Moon to Ao’s company Ecoline.
Trading in shares of Chinese Estates Holdings (0127.HK) was suspended on Thursday. They closed down 2.2 percent at HK$9.82 on Wednesday.
Reporting by Alex Frew McMillan; Editing by Richard Pullin