Of Cow Leather and Land Plots

The unfinished Rua dos Pescadores project, now controlled by various local entrepreneurs and people close to Pedro Chiang, has been green-lighted again, having previously been implicated in a corruption case involving Chiang and former official Ao Man Long - but the latest project development has caught the public off guard

It’s no exaggeration to say that the development of a land plot located on Rua dos Pescadores, originally zoned for the construction of a cow leather factory, has hit one snag after another. First given a green-light by the former Portuguese Administration in the city to change its usage to residential-cum-commercial development in 1993, the original developer had failed to utilise the land during an economic depression and was forced to sell the parcel rights to Trust Art Investment and Development Co. Ltd. in 2003. 

With new people at the helm, the development seemed to finally get off the ground with an official approval to increase the project height and gross floor area in 2006 – that is, before the former manager of Trust Art, local businessman Pedro Chiang, was found to be involved in the high-profile corruption scandal involving disgraced official Ao Man Long in 2007. The development abruptly stalled with two unfinished towers standing idle on the parcel for years. 

The project – given recent government approval for changes to the land concession – has raised eyebrows throughout society, with demands that an investigation be conducted by the corruption and Ombudsman watchdog on the land plot, which is now owned by people close to Chiang and other local political heavyweights and entrepreneurs through a complex shareholding structure. 

According to a dispatch by Secretary for Transport and Public Works Raimundo Arrais do Rosário in March, the Administration approved the plan of Trust Art to build two 13-storey towers over a six-storey podium for residential-cum-commercial development on the 3,507 square metre land plot. The gross floor area for residential usage and commercial usage respectively totals 21,253 square metres and 1,279 square metres. 

The present change is a far cry from the original change in 2006: the now-jailed official Ao approved the developer to build two 26-storey towers over a six-storey podium with the construction area for residential usage totalling nearly 40,000 square metres plus 1,174 square metres for commercial usage. However, the government struck down the 2006 change after Ao was found guilty of taking bribes from Chiang to green-light the amendment, but has allowed Trust Art to keep the land plot, which was granted a leasehold concession. 

Complex web 

Mr. Chiang – who is still at large despite being convicted by the local courts in 2011 and 2014 on counts relating to Mr. Ao’s case – originally held a 35 per cent stake in Trust Art through a company he once had controlling shares in, Trust Construction and Investment Co. Ltd., a major developer involved in many projects in the city. But right after the news of the businessman implicated in the corruption case of Ao broke in 2007, Trust Construction transferred all of its 35 per cent stake in Trust Art to Shabill Development Co. Ltd., controlled by Lou Chi Seng, Leong Lai I and Leong Kuok Wa.  

Both Mr. Lou and Ms. Leong Lai I had worked for Mr. Chiang and are currently listed as vice general managers of Trust Construction, according to the latest company records; the court documents of Mr. Ao’s case reveal Leong Kuok Wa is the brother-in-law of Mr. Chiang. The trio still own Shabill, company records show. 

Another major shareholder of Trust Art is Steady International Development and Investment Co. Ltd., with a 20 per cent stake, according to the records. Choy Wang Kong, business partner of Mr. Chiang; former legislator Ung Choi Kun; Miguel Wu Ka I, another a business partner of Mr. Chiang and also convicted in the corruption case linked to disgraced official Ao; and others are stakeholders of Steady International. 

The other shareholders of Trust Art include Jinlong Investment and Development Co. Ltd., linked to Executive Council member Chan Meng Kam; San Va Construction and Property Development Co. Ltd., concerning the sky-high project in Avenida Dr. Rodrigo Rodrigues that has stalled due to the height cap in the area of Guia Lighthouse; and Kian Weng Real Estate Development Co. Ltd., linked to Lam Ion Fun, chairman of Macau Cable TV, and other businessmen.   

Pledged loans 

Trust Construction, the flagship company founded by Mr. Chiang and now controlled by his sons Chiang Kin Tong and Bernardo Chiang Kin Nam, do not hold any shares on record of Trust Art, but the contact persons and managers of Trust Art – Lou Chi Seng and Choy Wang Kong – share the same contact address as Trust Construction. The official website of Trust Construction, updated late last year, lists the cow leather factory project as one of its ongoing undertakings, while Lou is also vice general manager of the company. 

This magazine asked Trust Construction about its involvement in the project and Trust Art but had not received a reply by the time this story had gone to press; Messrs. Lou and Choy were not immediately available for comment. According to company records, Trust Art asked for a loan of MOP630 million (US$78.75 million) in 2009 from Bank of China, having pledged the shares of the company.  

In the wake of the latest developments of the project, society is sceptical about the legality of the process given the idle nature of the land plot for many years and the lack of additional premiums imposed upon the project for changes to the concession. 

The Land, Public Works and Transport Bureau responded in a statement that no additional premium was imposed as the gross floor area proposed in the 2018 change was smaller than the area stated in the original 1996 contract. Concerning the government’s failure to take back the land given its idleness for years, the Bureau noted that the concession was a leasehold concession of indefinite duration, a land concession format only available prior to the handover in 1999.    

Casting a shadow 

The explanation from the officials and authorities has so far failed to assure some divergent voices. At least two civil groups have urged the Commission Against Corruption, which also performs the function of Ombudsman here, to investigate the case. 

In a letter sent to the watchdog by the Association of Synergy of Macau seen by this magazine, the group urges the Commission to look at several controversies in the case of the Rua dos Pescadores plot in a bid to ‘relieve the public anxiety that this concession change approval might involve collusion’. 

Although a leasehold concession has an indefinite duration, the Land Law gives the government the power to reclaim land plots that have failed to complete development within the construction period, the letter reads.  

‘[We] greatly doubt whether the SAR Government has launched procedures to take back the land plot [on Rua dos Pescadores] in accordance with the law . . . to safeguard the overall interests of the SAR,’ said the group. 

It also noted that the case had circumvented the public review procedures stated in the Urban Planning Law. The latest construction plan of the land plot was submitted to authorities for review in early 2014, right before the implementation of the Urban Planning Law, which means the case was not subject to a law that has stricter procedures than former regulations.  

‘But it took more than four years for the [2014] plan to be gazetted, making people wonder why it has taken such a long time if it does not have any problems,’ the group continued. 

The pan-democratic New Macau Association also shares similar suspicions concerning the cow leather factory land plot, delivering a petition to the watchdog in April.  

‘This case has once again [provoked] the doubts and criticisms of the public on the government’s mismanagement of land resources,’ the group stated in a letter sent to the watchdog. 

Following a hard-hitting report by the watchdog in 2015 about the ‘inactive, unsystematic and unscientific’ land management of Macau, the government has not improved, the group claims, concluding that: ‘The shadow cast over the [allocation of] land resources of Macau still lingers and continues.’ 

Timeline of Rua dos Pescadores plot 

March 1993 – The former Portuguese Administration grants land originally zoned for a cow leather factory to Nam Fong Construction and Real Estate Co. Ltd. for developing a residential-cum-commercial complex 

1996 – The Administration adjusts the gross floor area and land area of the project to 42,307 square metres and 3,507 square metres, respectively, while the construction period of the project is extended to 15 March 1999 

1996-2002 – Although the construction period of the project has been further extended to 30 July 2002, the developer still fails to complete the project on time 

2003 – All the rights of the land are transferred from Nam Fong to Trust Art Investment and Development Co. Ltd., managed by local businessman Pedro Chiang at the time 

2004 – The government approves the transfer of rights to Trust Art 

February 2006 – Former Secretary for Transport and Public Works Ao Man Long approves the changes in the land concession; namely, significantly enhancing the height limit and gross floor area of the project 

December 2006 – Ao is arrested for taking bribes and money laundering with regard to a slew of projects, including the February 2006 approval 

January 2007 – It is announced that Chiang is involved in Ao’s case, and wanted by the anti-corruption watchdog 

Mid 2007 – The 35 per cent share Chiang’s company, Trust Construction, holds in Trust Art is transferred to a firm called Shabill Development Co. Ltd. 

January 2008 – Ao is convicted of accepting bribes and money laundering for a series of projects, including the Rua does Pescadores case, in the first round of his trial 

2009 – Trust Art shareholders pledge their shares to Bank of China for a loan of MOP630 million 

January 2010 – The Administration strikes down the 2006 approval concerning the changes of land concession but allows Trust Art to keep the land plot 

January 2014 – The developer submits a revised construction plan to the Land, Public Works and Transport Bureau for approval 

1 March 2014 – The city’s first Urban Planning Law comes into force but construction plans submitted before are not subject to the new law 

February 2015 & March 2016 – The Land Committee holds two closed-door meetings to discuss the case and approve the latest change 

March 2018 – A dispatch by Secretary for Transport and Public Works Raimundo Arrais do Rosário approving the changes is finally gazetted 

[Sources] Official Gazette, Macau courts, company records, New Macau Association 

Key figures and companies 

Pedro Chiang 

A prominent local businessman involved in many real estate projects for decades, Mr. Chiang left the city upon being implicated in the former disgraced official Ao Man Long’s corruption scandal. Local courts sentenced him to an imprisonment term of six years and 10 months in 2011 and another jail term of three years and three months in 2014 in cases relating to Ao – sentences he has yet to serve. 

Chiang was last heard of in Portugal in 2009, since when his whereabouts have been purportedly unknown. The International Criminal Police Organisation once placed the businessman on their wanted list, but his name has been removed from the red notice list since last year, according to Portuguese language newspaper Ponto Final. 

Trust Construction 

It is a flagship property firm founded by businessman Pedro Chiang, his wife Leong Lai Heng and others in the 1980’s. According to the firm’s official website, it had developed 131 projects as of December 2017, comprising over 4,700 flats, 16 villas, 74 shopping malls, 662 commercial units and more than 2,400 car parking spaces in the city. There are still more than 45 projects that are in the development or planning stage, the website added. 

The company is now controlled by Chiang’s sons, Chiang Kin Tong and Bernardo Chiang Kin Nam. 

Lou Chi Seng and Leong Lai I 

Both are vice general managers of Trust Construction; Mr. Lou once held a minor stake in the company before transferring the shares to Bernardo Chiang. The duo and Pedro Chiang’s brother-in-law, Leong Kuok Wa, control Shabill Development Co. Ltd., the largest shareholder of Trust Art. 

It is noteworthy that the trio testified as witnesses in the first trial of Pedro Chiang in 2010. During the process, the court heard that some staff and family relatives of Mr. Chiang – namely his father Lam Him (the spelling of their surnames is different in English but is the same in Chinese) and Lou’s sister Lou Heong Kam – testified that they were only nominal shareholders of companies that were ultimately controlled by Pedro Chiang, according to media reports at the time. 

Choy Wang Kong 

Mr. Choy had been involved in property development, manufacturing and natural resources exploration in Mainland China and Macau for more than 30 years, according to a Hong Kong Stock Exchange filing in 2007. He was also reported to be one of the shareholders of The Macau Roosevelt Hotel, located next to the Macau Jockey Club in Taipa, according to media reports in 2013. 

San Va Construction and Property Development Co. Ltd. 

The company, founded by Ngai San Kao, is now controlled by the family relatives of Mr. Ngai. It is best known for its unfinished project in the Guia Hill district: San Va bought the land near Guia Lighthouse to develop a 126-metre high building in 2006, but the construction was halted in 2008 when then-Chief Executive Edmund Ho Hau Wah imposed a height cap of 52.5 metres for buildings in the area.  

The unfinished project has since sat idle as the authorities and developer have so far failed to reach any consensus on the prospects of the project. The government said in 2016 that it would allow the development to maintain its current height of 81 metres, a decision met with strong criticism from society. No progress has since been made.