Former Secretary for Development Mak Chai-kwong and former assistant highways director Tsang King-man have been cleared of their convictions in a rent allowance fraud case, the Court of Final Appeal ruled on Wednesday.

Mak, 64, and Tsang, 59, were accused of defrauding the government of around HK$700,000 in rent subsidies between 1985 and 1990. According to the charges, the pair cross-rented their flats to each other and applied for subsidies, claiming that they were tenants in 22E and 21E, City Garden, North Point.

However, the lower court had found them to be the apartments’ owners, and that they had held the properties for each other.

Mak on the right and Tsang at the centre. File Photo: Stand News.

The pair were found guilty of six counts of deceiving the government by the District Court in 2013 and given suspended prison terms of eight months.

Their initial appeal was rejected by the appellant court. They then lodged an appeal to the Court of Final Appeal, arguing that the trial judge had erred in his ruling, and so too had the appellant court in upholding the conviction.

The new home of the Court of Final Appeal. Photo: Wikicommons.

Peter Duncan, Senior Counsel for the Department of Justice, argued that even if they were not owners of each other’s properties it did not mean that the two did not enter into an agreement, since circumstantial evidence showed that the pair lived in the same building and signed rental agreements with each other on the same day.

However, the Court of Final Appeal judges doubted whether the prosecution had sufficient evidence to prove that they were beneficial owners of each other’s properties at the time the flats were purchased, which was the basis of the case. The judges also said that although cross-renting does not look good, it is not forbidden under the law, Commercial Radio reported.

After deliberation, the five judges unanimously quashed Mak and Tsang’s convictions and sentences. The prosecution was also ordered to pay the defendants’ court fees.

Mak thanked his friends and family for their support as he left the court and said that he could finally put the matter to rest. He did not reply as to whether he will be returning to the civil service.

Karen is a journalist and writer covering politics and legal affairs in Hong Kong for HKFP. She has also written features on human rights, public space, regional legal developments, social and grassroots activism, and arts & culture. She is a BA and LLB graduate from the University of Hong Kong.