Integrity Focus

In the course of a corruption investigation by the ICAC, it was revealed that a former property agent deceived a bank, the Hong Kong Mortgage Corporation Limited (HKMC) and its subsidiary into maintaining to grant a mortgage loan of about $4.9 million to him by making false representations that a residential property was for self-use. The defendant was today (May 16) sentenced to 16 months’ imprisonment and the District Court also ordered to confiscate over $1 million from the defendant.

Chiu Ka-wai, 39, earlier pleaded guilty to two counts of fraud, contrary to Section 16A(1) of the Theft Ordinance.

In sentencing, Judge Mrs Adriana Noelle Tse Ching said the defendant requested other to assist in committing the offences which was serious in nature, warranting a deterrent sentence.

The judge also approved the prosecution’s application and ordered to confiscate crime proceeds of over $1.07 million from the defendant, who is required to satisfy the confiscation order within 6 months, failing which he will have to serve an additional term of imprisonment of 25 months.

The court heard that banks in Hong Kong were required to comply with the guideline of the Hong Kong Monetary Authority on loan-to-value ratio requirement when granting a property mortgage loan. Under the Mortgage Insurance Programme (MIP) launched by the HKMC in 1999, participating banks could provide a maximum 80 per cent loan-to-value ratio to a self-occupancy residential property valued at $6 million and below.

Since May 2018, the MIP was carried out by the HKMC Insurance Limited (HKMCI), a subsidiary of the HKMC. The Hongkong and Shanghai Banking Corporation Limited (HSBC) is a participating bank of the programme.

In January 2016, the defendant signed a provisional agreement for purchasing a residential property at $6 million and applied for a mortgage loan under the MIP with HSBC. He declared in the relevant documents that the property was for self-occupancy. The application was approved by the HKMC and the defendant was offered a mortgage loan of about $4.9 million from HSBC. The loan was released to him in March 2016.

In May 2017 and January 2020, HSBC sent letters requesting the defendant to confirm his self-occupancy of the property. The defendant made confirmations and further submitted his bank statements and a water bill of the property as supporting documents upon the request of HSBC. The bank, the HKMC and the HKMCI were satisfied that the defendant had complied with the self-occupancy requirement and maintained the mortgage loan granted to him.

The ICAC investigation arose from a corruption complaint. Enquiries revealed that the defendant leased out the property to two tenants during the above period. He had requested one of the tenants to transfer the account of the property held with the Water Supplies Department to him so as to facilitate his submission of water bill as supporting document. Had HSBC, the HKMC and the HKMCI known that the information provided by the defendant was false, they would not have maintained the mortgage loan granted to him.

HSBC, the HKMC and the HKMCI had rendered full assistance to the ICAC during its investigation into the case.

The prosecution was today represented by Senior Public Prosecutors Steven Liu and Lucas Lai, assisted by ICAC officers Sudhir Gidwani, Elva Wong and Gary Li.