Hong Kong's rich and powerful in spotlight

The arrests of a former top official along with two property magnates raises concerns about ties between business and government.

Transparency International's 2011 Corruption Perceptions Index ranked Hong Kong as the 12th least corrupt place in the world. Alex Hofford / EPA

If evidence was needed that Hong Kong's corruption watchdog was ambitious in its drive to investigate alleged fraud at all levels of society, then recent arrests in the city surely provides it.

Among them were the brothers Raymond and Thomas Kwok, the co-chairmen of Sun Hung Kai Properties and part of a family estimated by Forbes magazine to be worth US$18.3 billion (Dh67.2bn). They were taken into custody last month on the orders of the Independent Commission Against Corruption (ICAC).

It is part of what has been described as the biggest investigation since the ICAC was launched in 1974. The organisation has never before taken on such powerful business figures.

Also arrested was the brothers' long-time associate Rafael Hui, the former Hong Kong chief secretary, the government's second-in-command.

No charges have been made against the three men, and after being released on bail, the brothers gave a press conference where they denied wrongdoing. Mr Hui resigned as a non-executive director of the pan-Asian life insurance group AIA.

The controversy has erupted at a sensitive time, coming just weeks after activists raised concerns about ties between business tycoons and Donald Tsang, Hong Kong's outgoing chief executive.

Mr Tsang apologised last month for a furore that developed after the ICAC launched an enquiry, the first of its kind involving a Hong Kong chief executive, when it was revealed he had accepted overseas visits and trips on yachts from property developers.

It is set to cast a shadow over the final period in office of Mr Tsang, who steps down in three months' time to make way for Leung Chun-ying, a property millionaire last month declared the victor in the chief executive election days before the arrests of the Kwok brothers.

One could be forgiven for wondering whether Hong Kong is a hotbed of business and political corruption. Yet indicators point to the opposite.

In particular, the 2011 Corruption Perceptions Index from Transparency Internationalranked Hong Kong as the 12th least corrupt place in the world.

The recent episodes do, however, suggest concerns may be justified over what is often seen as the all-too-close relationship between the special administrative region's business and political elites.

"I think most people in Hong Kong are very concerned about this so-called business and official collusion," says Cheung Chor-yung, the author of The Quest for Civil Order: Politics, Rules and Individuality, and a senior teaching fellow at the City University of Hong Kong.

"The arrests themselves show at least that ICAC is competent enough to pick on anybody suspected of corrupt practices, no matter how high ranking they are."

Analysts such as Mr Cheung see various pitfalls in the relationship between business and government in Hong Kong.

Unlike when Hong Kong was a British colony, officials are now unlikely to leave the territory when they retire. That raises concern if they then take jobs in the private sector, especially if it is with companies they dealt with while part of the administration.

Additionally, the trend to bring figures with business experience into the bureaucracy, while enlarging the government's pool of talent, might lead to a blurring of the boundaries between the public and private sectors.

"There might be a change of culture within the bureaucracy to the extent people don't see there's a problem if you're closely connected with the business community," says Mr Cheung.

Also, with greater investments by mainland Chinese tycoons in Hong Kong, some caution that the less ethical business practices often seen on the mainland could become more common in the special administrative region, although Mr Cheung acknowledges these fears have yet to be realised.

For all the gripes, sometimes justified, the public in Hong Kong have about politicians and tycoons cosying up to one another, the territory is certainly less corrupt than it used to be.

Back when the ICAC was founded, corruption was so bad that it was said, only half jokingly, that you would have to pay firefighters to turn on the water to put out a fire, and pay them again to turn it off to limit water damage.

By comparison, having a chief executive who has enjoyed a few junkets seems a modest problem, albeit one that is still worth investigation.

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