Hong Kong’s Independent Commission Against Corruption (ICAC) recently announced the breakthrough of a corruption and fraud case at the construction site of the residential project on Anderson Road, Kwun Tong, under the Cheung Kong Group. Ten individuals have been arrested in connection with the case. Some analysts suggest that this case may not be an isolated criminal matter but part of the Chinese Communist Party’s (CCP) pressure tactics to prevent the Li Ka-shing family’s businesses from selling their assets at the Panama ports, aiming to delay the port transaction and impact the dynamics of US-China trade negotiations.
The ICAC, directly under the jurisdiction of the Chief Executive of Hong Kong, revealed on May 21 that its “Drumbeat” operation targeting the residential project in Kwun Tong has successfully apprehended 10 suspects, including employees of the main contractor, implicated sub-contractors (commonly referred to as “subcontractors” in the mainland), and on-site supervisory staff from an engineering consulting company.
According to the ICAC’s report, the sub-contractors deviated from the approved building drawings by the Buildings Department to cut costs, reducing the quantity of steel bars, adjusting spacing, and bribing the site supervisors to avoid scrutiny. Inspections by the Buildings Department found issues with the steel bar configurations in the six buildings involved, including “wide spacing, insufficient quantity, incorrect dimensions, missing bars, and misplaced positioning,” although the percentage of missing steel bars was less than 10% and did not pose a threat to the overall structural integrity.
The report also disclosed that the implicated sub-contractors engaged in bribery of supervisory staff, offering bribes ranging from thousands to tens of thousands of dollars, mooncake vouchers, lavish restaurant banquets, and involvement in activities at nightclubs amounting to tens of thousands of dollars.
Grace Ng, Chief Structural Engineer of the Buildings Department in Hong Kong, stated that although the percentage of missing steel bars was low and did not compromise the structural safety, the contractor has been instructed to submit remedial plans, including reinforcement measures and reconfiguring the steel bars.
Legislator Lu Weiguo, who had criticized the anti-extradition bill movement in Hong Kong, believes that despite the subcontracting system, the main contractor still bears the primary responsibility. He publicly criticized the damage this case has inflicted on the reputation of the construction industry in local media.
Responding to the investigation, the Li Ka-shing family’s business, the Cheung Kong Group, expressed high concern over the case, showing support for the law enforcement actions of the ICAC and currently negotiating follow-up solutions with relevant authorities. The involved project was the first-phase development at Anderson Road, Kwun Tong, acquired by the Cheung Kong Group in 2020 for HK$4.95 billion, comprising six buildings providing nearly 3,000 residential units.
Before the recent action by the ICAC in Hong Kong, Li Ka-shing’s family flagship company, CK Hutchison Holdings (CKH), was embroiled in a highly publicized political controversy concerning the sale of ports in Panama.
In March of this year, CKH announced plans to sell its port operations in 43 locations worldwide to an investment consortium led by the US-based BlackRock Group, including vital ports at the two ends of the Panama Canal.
These ports hold about 3% share in global maritime trade and have been under CKH’s concession since 1998, with a 25-year extension contract signed in 2021. While the transaction had the support of then-US President Trump, it triggered strong disapproval from the Chinese authorities.
Pro-Beijing media outlets in Hong Kong criticized Li Ka-shing’s alleged “selling out” actions, leading to an antitrust investigation initiated by China’s State Administration of Market Regulation, causing the deal to be temporarily suspended.
Commentator Li Linyi raised profound questions and analysis regarding the investigation into the Cheung Kong Group and the arrests of related individuals. He told Epoch Times that the scrutiny on the Cheung Kong Group might not solely be about construction corruption but a customary coercion tactic targeted at Li Ka-shing and his family’s businesses by the CCP.
Li pointed out that the investigation against the Cheung Kong Group came at a crucial juncture in US-China trade negotiations. He stated, “During specific timings, cases against specific companies, regardless of the details of the case itself, are bound to exert immense pressure on these companies.”
He further analyzed the CCP’s strategic goal in this move, indicating that the CCP aims to delay CKH’s port sale transaction to enhance its leverage in US-China trade negotiations.
In the backdrop of US-China rivalry, the Cheung Kong Group not only confronts the ICAC investigation and quality issues in construction but also the political pressure arising from the port sale transaction. Public attention is keen on the impact of this case on Hong Kong’s business environment and the future development of the Cheung Kong Group.
Li Linyi warned that the CCP’s delay strategy carries inherent risks: “Once the patience of the Trump administration runs out, this CCP move might backfire.” Such indirect pressure tactics, regardless of affecting specific business transactions, could potentially lead to long-lasting and far-reaching adverse effects on the overall business environment in Hong Kong.