Kapok | The Crux of the Matter

Eric Sautedé

A week ago, HK01, a Hong Kong-based Chinese online newspaper cooperating with The International Consortium of Investigative Journalists revealed that our Chief Executive, Fernando Chui Sai On, and his legislator elder brother, Chui Sai Cheong, had been closely connected to an offshore company, Yee Shing International Limited, registered in the British Virgin Islands, for about two decades. As a subsidiary of Hopewell Holdings Limited, a major infrastructure and property firm listed on the Hong Kong Stock Exchange since 1972 (with revenues of HKD6.64 billion in 2015), this offshore had in effect been co-founded by Chui Sai Cheong together with a long term executive of Hopewell.
The Chief Executive was only director of the tax-free company for two short years, starting in 1997, and resigned from his directorship on July 30th 1999, shortly before it was announced that he would become, after the December 19 handover, the new Secretary for social affairs and culture. His brother, on the contrary, was only out of Yee Shing for a short spell in 1994, and was still listed as a director in 2010 when Mossack Fonseca, the now rather infamous Panamanian law firm, lost the custody contract for the offshore. HK01 consequently wonder why this function had never been enclosed in Chui Sai Cheong’s declaration of assets, the one all senior officials are supposed to divulge since a more stringent law on such matters was passed in January 2013—more than six years after the arrest of Ao Man Long, better late than never…
Interestingly enough, both brothers came up with a public explanation, and of course these were in line with the responses aired back in April when the so-called Panama papers, of which 29 percent of offshore firms were incorporated either in Hong Kong or China, started to unravel: why the big fuss, when all this is legal?! Chui Sai Cheong gave an interview to the ever-zealous and pro-establishment Chinese newspaper Macao Daily revealing that he had actually resigned from the director position in July 2012 (spoiler!), and that he therefore acted in accordance with the new asset declaration law. And then, Chui Sai On’s Spokesperson’s Office made it publicly known that by resigning from all business-related positions prior to his nomination to senior public posts he had been “strictly following the Basic Law of the MSAR”. And things simply went back to normal: silence!
I already argued earlier this year that governing is not only a matter of legality, and that responsibility in politics require slightly more than being law abiding in grey areas—and the Panama papers are raw diamonds in that respect. The time when traditional paternalistic elites could profess “do as I say and not as I do” is coming to an end, and unfortunately not necessarily pointing to a reassuring future, whatever the setting, democratic or less so—think US, the Philippines, China, etc.
What these offshore leaks have revealed for Macao is well established: paragons of virtue and patriotism, even the ones representing Macao at the CPPCC or the NPC, are the ones practising “tax evasion” on an industrial scale while holding dual nationality. But for the Chui, dysfunctions are of another nature: what is the exact purpose of holding an official position? The younger Chui resigned 12 days before being nominated Secretary and the elder Chui resigned  from Yee Shing right in the middle of the revision of the new asset declaration law (passed in 2013, but introduced in December 2011)? In finance, that would be called “insider trading”! And then what about the separation of powers: the two brothers played musical chairs in the very same business! Moreover, Chui Sai On was supposed to champion social and economic housing, both as a legislator starting in 1992 and as a Secretary afterwards, while his brother, now a legislator, was helping Hopewell ripe the full benefits of luxury real-estate programs such as Nova Taipa and then Nova City?
Promiscuity is a powerful excuse on a tiny territory that has a multi-secular tradition of opacity, but still, this is too big to go unnoticed.