Integrity Focus

The ICAC had earlier charged a property buyer with fraud after its corruption investigation revealed that the buyer had allegedly induced a bank not to demand repayment of a mortgage loan of over $8 million granted with a loan-to-value (LTV) ratio of 80 per cent for meeting the owner-occupied requirement by concealing that the property was leased out. Upon further legal advice from the Department of Justice, the buyer’s son was charged yesterday (December 27).

Lau Hong-chit, 23, faces one count of fraud, contrary to Section 16A of the Theft Ordinance. He was released on ICAC bail, pending his appearance in the Eastern Magistrates’ Courts tomorrow (December 29) for mention.

According to the guidelines issued by the Hong Kong Monetary Authority, banks are required to comply with the LTV ratio requirement on owner-occupied residential mortgage lending. At the material time, China CITIC Bank International Limited (CNCBI) was a participating bank in the mortgage insurance programme of the HKMC Insurance Limited (HKMCI) (the Programme), which provided a mortgage loan with an LTV ratio of up to 80 per cent for a self-used private residential property valued between $8 million and $10 million.

In late February 2020, Lau’s mother, Wong Hin-ning, purchased a private residential property in Ho Man Tin at $9.98 million on behalf of Lau when he was abroad. A few days later, Wong and Lau applied for a mortgage loan with an LTV of 80 per cent with CNCBI under the Programme and declared that the property would be occupied by the duo.

Wong and Lau signed a declaration on the mortgage loan application form that they were under an obligation to notify CNCBI immediately if the property was no longer occupied by them. The bank approved the application and granted a mortgage loan of over $8 million to Wong and Lau in late June 2020.

It is alleged that between August 2020 and September 2021, Lau and Wong leased out the property to a tenant, but they failed to inform CNCBI of a change in the occupancy status of the property, and with intent to defraud, induced CNCBI not to demand repayment of the mortgage loan granted to the duo in relation to the property or impose other conditions, including an increase in the interest rate.

Wong, 48, insurance agent, was charged in October this year with two counts of fraud in respect of the above concealment and a subsequent rental transaction. No plea was entered when she appeared in the District Court today (December 28). Her case was adjourned to March 7, 2024 for mention.

CNCBI and the HKMCI have rendered full assistance to the ICAC during its investigation into the case.