Liaison Office's Massive Property Porfolio in HK

The liaison office, through a company, owns over 700 properties in Hong Kong

Through a shell company, Bejiing owns a lot of property in Hong Kong. Even better it didn't have to pay any stamp duties on the staggering 757 residences, offices, car parks and entire buildings as of February last year.

The political party Demosisto, led by Joshua Wong Chi-fung released the findings today, which are staggering to say the least.

Joshua Wong of Demosisto released the findings today

The report says the company, called Newman Investment Company Limited, which was set up in 1972, bought 400 residences before the handover in 1997, about 180 between 1998 and 2014, and then another 130 between 2014 and last year. The total value is estimated at HK$3.4 billion.

Previously local media had estimated the company, whose five directors appear to have the same names as officials in the liaison office, had a portfolio of between 300 to 500 properties. This was obviously grossly underestimated.

Wong says the increased number of flats in the last few years shows Beijing is increasing its reach in Hong Kong.

"Beijing has scaled up its property empire after the 'umbrella movement' in 2014, reaching out its tentacles from Hong Kong Island to other places in the city," Wong said, referring to the large-scale civil disobedience movement that blocked part of the city for 79 days over universal suffrage.

He said Demosisto would submit these findings to the US Department of State, the Congressional-Executive Commission on China, and Britain's All-Party Parliamentary Group Hong Kong.

However, pro-establishment lawmaker Regina Ip Lau Suk-yee, chairwoman of the New People's Party, said she believed most of the residences were for housing liaison office employees.

Regina Ip says the flats are used to house liaison office staff

"When rents are so expensive in Hong Kong, I don't see any problem for the liaison office to purchase flats for its employees to live in," she said. "It might have bought more units in recent years, as it expected to become more and more costly."

We all know housing is expensive in Hong Kong, but they snapped up over 700 properties, not all of them flats. So how many people work in the liaison office, and do they actually live in these flats? What about the offices and entire buildings? What are those used for?

Demosisto estimates at least 722 staff work in the liaison office. What do they all do?

Perhaps even better, this company, because of its links with the liaison office, does not need to pay HK$124 million in stamp duty over the past five years of property purchases.

According to the Stamp Duty Ordinance, the central government, or any "incorporated public officer or any person acting in his capacity has a public officer shall not be liable for the payment of stamp duty".

The company bought 20 flats at Grand Central last year

Seems like this ordinance was specifically written to benefit a particular company...

Last February, a local newspaper reported the liaison office had paid HK$247.5 million, through Newman Investment, for 20 flats at Grand Central complex in Kwun Tong, according to the Land Registry. The office later insisted the properties were used as staff quarters, and denied suggestions it had intended to resell them for a quick profit.

While many of these properties may be "housing", they still are a good investment...