Multi-billion dollar compensation bill hanging over Joseph Lau

Hong Kong businessman Joseph Lau Luen Hung will have to pay compensation amounting to HK$12.5 billion (US$1.6 billion) to Chinese Estates Holdings Ltd. if local courts adhere to their decision that his company, Moon Ocean Ltd., has to return the land plots for the La Scala residential project to the MSAR Government.
According to the annual report of Chinese Estates released this week, the shareholders of Chinese Estates perceive the amount of compensation to be made by Moon Ocean to be ‘fair and reasonable’ should the company lose its court battle with the SAR Government.
In 2006, Moon Ocean was approved by the SAR Government to acquire the five plots opposite Macau International Airport for MOP1.37 billion for the La Scala project. But the acquisition was invalidated by the authorities in 2012 once linked to the corruption case of ex-Secretary Ao Man Long.
Moon Ocean filed an appeal against the government’s decision but was turned down by the Court of Final Appeal in June this year.
According to Chinese Estates, local courts are still hearing another appeal filed by Moon Ocean against a notice from the Land, Public Works and Transport Bureau that the CE had declared the previous act of approval of the increase of residential gross floor area of the related plots as well as an exchange of land in March 2011 to be invalid.
As the controlling shareholder of China Estates, Mr. Lau stepped down from the chairman’s position in the company after he was found guilty in 2005 of corruption and money laundering involving the bribery of the former Secretary in exchange for successfully bidding for the parcels for the residential project.