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The Secretary for Justice, Ms Elsie Leung today (Thursday) explained in a detailed statement to the Administration of Justice and Legal Services (AJLS) Panel of the Legislative Council her reasons for not prosecuting Ms Sally Aw Sian in the Hong Kong Standard case.

She pointed out that the decision was made on the basis that there was inadequate evidence. An additional consideration was that the prosecution of the chairman of a well-established and important media group at that time could have led to the failure of the group, which would have sent a very bad message to the international community.

Quoting former Attorney General, Mr Michael Thomas from the published "Prosecution Policy", Ms Leung pointed out that "even if there is evidence that tends to prove the necessary ingredients of an offence, a bare prima facie case is, generally speaking, not enough to warrant a prosecution.

"There must be a reasonable prospect of securing a conviction because it is not in the interests of public justice, nor indeed of the public purse, that weak, or borderline, cases should be prosecuted," Mr Thomas had said.

Ms Leung emphasised that the decision not to prosecute Ms Aw was made regardless of her position or status, but in compliance with Article 63 of the Basic Law and the well-established prosecution policy.

"The fundamental principle that there should not be any prosecution unless there is sufficient evidence should not be abandoned out of fear of criticism against me," she said.

"As Secretary for Justice, my role is to defend the independence and impartiality of criminal prosecutions.

"I will not be swayed by public comment to depart from the principles of our prosecution policy. In preserving the rule of law in Hong Kong, I shall adhere to this principle," she said.

The following is a press statement by the Secretary for Justice with main points. The full text of her statement at the AJLS Panel will be issued via GNIS separately.

I am grateful for being given this opportunity to explain my decision not to prosecute Madam Aw Sian.

I wish to state at the outset that my decision in the Hong Kong Standard case not to prosecute Aw Sian was made on the basis that there was inadequate evidence.

I also considered the matter from the public interest angle. The considerations are detailed below.

At no point was any consideration given to the political or personal status of Aw Sian.

Under Article 63 of the Basic Law, the Department of Justice shall control criminal prosecutions free from any interference. As Secretary for Justice, I have exercised this independent prerogative impartially in this particular case.

On 23 March 1998, I informed this Panel that at the conclusion of the trial of the three accused in the Hong Kong Standard case, I hoped to be in a position to make a public statement upon that decision. The trial concluded on 20 January 1999, and I am now in a position to address this matter.

I wish, firstly, to refute accusations that, after the case ended, I never intended to give an explanation, or that I have been stalling. My primary concern has been that I should not prejudice any appeal by those convicted, or any trial that might result from the ICAC's further enquiries.

When the judgment was delivered on Wednesday, 20 January 1999, my department issued a press statement saying we would study the Reasons for Verdict, the report of the case being prepared by counsel who conducted the prosecution, and if necessary, the transcript. The statement then went on to say that we hoped shortly to be in a position to make a public statement, and that the timing of any such statement would need to take into account any matter which might be raised if there were an appeal against conviction.

At the time the statement was made, it was not clear whether an appeal against conviction might raise issues that would make it improper for me to comment on the case. After studying the documents referred to in the press statement, it became apparent that this was not the case. I so informed the Clerk to this Panel on Saturday, 23 January.

At the same time, I informed the Clerk that I was awaiting a report by the ICAC as to whether there was any further evidence that I needed to take into account. The ICAC had obtained my consent to interview the three defendants convicted in the case, and informed me that the response from the defendants would be forthcoming by the end of last week or early this week. Hence I agreed to attend before the Panel today. Although those responses have not yet been received, in the light of the public concern over this case I have decided that I should go ahead with my statement today.

I also wish to reiterate the two reasons that I gave to the Panel last year for not then explaining my decision. First, according to a well-established policy, the Department of Justice should not disclose the reason for deciding not to prosecute someone. The second reason was that, until the conclusion of the trial, I could not make any remarks that might prejudice a fair trial. The restrictions relating to matters that are subjudice are also well established.

You can see therefore that my decision not to make a statement until to-day was not a deliberate attempt to stall for time, but was in strict compliance with well-established principles. The existence of those principles safeguards the rule of law in Hong Kong.

Overview of the recent trial

I would like to give an overview of the prosecution's case at the recent trial. Over some 3 years from 1994, the circulation figures of the Hong Kong Standard and the Hong Kong Sunday Standard were routinely exaggerated. It was alleged that So Shuk-wa (the General Manager), Wong Wai-shing (Circulation Director) and Tang Cheong-shing (Finance Manager) were responsible for this matter.

Circulation figures are important to advertisers. A company existed in England called the Audit Bureau of Circulation Ltd ("ABC") which would certify circulation figures subject to compliance with its rules and satisfactory audits. It was alleged that Hong Kong Standard submitted false documents to inflate circulation figures. First, it printed more copies than actual sales. A company called Mornstar was purchased and run by HK Standard employees to buy the excess copies. HK Standard issued invoices and sold the extra copies to Mornstar, which issued cheques to HK Standard in payment of them. HK Standard then paid back the amount received to Mornstar by way of fictitious service charges.

Apart from Mornstar, three other distributors also purchased the paper in the same manner. Warehouse premises were rented in the name of Mornstar for the storage of the excess copies purchased by Mornstar for a week or so, and then they were disposed of by a contractor who carried them to Wanchai pier as waste paper.

Hence on the face of the accounts and documents, HK Standard complied with the requirements of ABC for certification of the inflated circulation figures. In August 1996, upon information, ICAC found 14,000 copies of the paper discarded in Wanchai pier and started its investigations. The 3 accused were prosecuted.

Prosecution case against the three defendants

In his Reasons for Verdict, the judge summarised the case against the accused as follows:

* So admitted her part in the scheme when interviewed by ICAC; one of her subordinates attributed to So incriminating remarks as to the purpose of Mornstar; a distribution manager testified that she instructed him to inflate the figures; a former general manager of the company implicated So by giving evidence of conversations concerning the false inflation of figures; and the circumstances and contemporaneous documents demonstrated her knowing involvement.

* Wong confessed to his part in the scheme when interviewed by ICAC; one of his subordinates and another employee gave evidence that he was at the core of the charges; the judge said that their evidence demonstrated for sure that Wong was instrumental in falsifying the sales figures to cover copies of the newspaper that were dumped.

* Tang admitted to involvement when interviewed by the ICAC. His position as the former circulation director, given that the inflation of the circulation figures and dumping had been proved, the documentation for which he was responsible, and evidence of his close involvement with Mornstar also implicated him.

The judge also spent 3 pages of his Reasons for the Verdict to explain why in the crime of conspiracy to defraud, A may be charged for conspiracy with B and yet B is not prosecuted. This is because certain evidence may only be admissible against A and not against B. For example, a confession can only be used as evidence against the person who made it and not as evidence against others, unless that person is called as a prosecution witness. In practice, in order to enable the accused to understand fully what case he has to meet, it is necessary to name in the charge the person with whom he is alleged to have conspired, but it does not necessarily follow that there is sufficient evidence to prosecute the latter. The judge emphasised that he had to decide whether the accused conspired with Aw Sian, and not whether Aw Sian conspired with them.

In brief, there were 53 witnesses and nearly 3000 pages of exhibits in court to prove that the accused were guilty of the offences for which they were prosecuted, but none of these witnesses or exhibits implicated Aw Sian.

Reasons for not prosecuting

When I made a decision not to prosecute Aw Sian in February last year, I found the evidence against the 3 accused was overwhelmingly more weighty than that against Aw Sian. Raymond Lo, the distribution manager did not implicate her. No other witness implicated her. There were no documents or business records that showed any connection between the crimes and Aw Sian. Therefore, I could only look at her statement. In doing so, I could not single out a few answers, but needed to look at the totality of the evidence. There were altogether 224 questions and answers. We cannot simply look at a few answers that might incriminate her and disregard others that point the other way.

In her statement, Aw Sian repeatedly emphasized that she had no intention to defraud ABC, that she agreed to increase the printing and sales of the paper to attract advertisers, but she did not know about the details. All such matters were left to So. Ms Aw did not know about Mornstar and was not aware of the falsification of documents. When the ICAC told her what had been done, she said that she had no idea that it constituted false accounting, and insisted that had she known that it would be necessary to make false accounts, she would not have permitted them to do it. When the ICAC told her of the illegal acts, she immediately told the others to stop. Ms Aw should perhaps have exercised greater supervision and control of her subordinates. She was perhaps unwise in going along with what she called a temporary plan to assist sales of the paper without going into details as to what was planned. However, I was considering a charge of conspiracy to defraud. I was not convinced that the conduct of Mr Aw was in fact fraudulent.

Some people have suggested that, provided there is some evidence against Ms. Aw, I should prosecute her. It is suggested that additional evidence may emerge during the trial; that the defendant would have the opportunity to explain her actions; and that the court could then decide on her guilt or innocence. I must reject such an approach. As I said earlier, no one must be subjected to a criminal trial unless clear evidence exists to justify that course. If it were otherwise then even if the court was ultimately to find the suspect not guilty, the accused would wrongly have been subjected to trauma, to legal costs, and to damage to his reputation. To initiate a prosecution simply to exonerate the Secretary for Justice from suspicion when there is not sufficient evidence to provide a reasonable prospect of conviction would amount to a miscarriage of justice.

Some people are of the view that since Ms. Aw stood to benefit from the crime she must be aware of it and be responsible for it. The crime of conspiracy requires an agreement between two or more persons to commit an unlawful act with the intention of carrying it out. There must be an intention to carry out the illegal elements in the conduct contemplated by the agreement, in the knowledge of those facts which rendered the conduct illegal. As the evidence against Ms. Aw did not satisfy these criteria, even when taken at its highest, I was not prepared to proceed upon the basis of surmise. Since I have concluded that there was no reasonable prospect of securing a conviction, it would be wrong in principle for me to bring a prosecution. Nor will I do so simply to avoid public criticism of my decision.

Also, from the public interest point of view, I considered it not right to prosecute Aw Sian. At that time, the Sing Tao Group was facing financial difficulties and was negotiating restructuring with banks. If Aw Sian was prosecuted, it would be a serious obstacle for restructuring. If the Group should collapse, its newspapers (which include one of only two English newspapers in Hong Kong) would be compelled to cease operation. I wish to add that several other newspapers had folded in late 1996, 1997 and 1998. Apart from the staff losing employment, the failure of a well-established important media group at that time could have sent a very bad message to the international community.

Having assessed the evidence before me and, weighing the effect of the prosecution, the role played by Aw Sian in the matter, and whether the consequences of the prosecution were proportionate to the seriousness of the alleged offence, I decided that Aw Sian should not be prosecuted both from the sufficiency of evidence angle and as a matter of public interest.

Prosecution policy

Finally, I would like to point out some legal principles. Normally, when the Department of Justice decides not to prosecute, it will not give reasons, in order to protect the person from an unfair trial outside the court. I would make it an exception this time due to the following reasons :

* I need to respond to accusations of bad faith on my part

* The disclosure of parts of her statement is unfair to Aw Sian

* I need to respond to concerns about the rule of law.

The decision not to prosecute was not based on Aw Sian's personal position or status. The requirement in law as to the sufficiency of evidence is uniform, and does not vary with the status of a person. Paragraph 10 of the Prosecution Policy begins as follows:

"10. In response to a question in the Legislative Council in March, 1987, Michael Thomas QC, Attorney General, emphasized that the Attorney General has a discretion whether or not to prosecute and he set out the factors to be taken into account when making a decision in these terms :

First, there must be enough evidence to prove all the ingredients of an offence. This is not always easy to determine, especially where an offence requires proof of a state of mind or an intention of which there is often little or no direct evidence. Even if there is evidence that tends to prove the necessary ingredients of an offence, a bare prima facie case is, generally speaking, not enough to warrant a prosecution. There must be a reasonable prospect of securing a conviction because it is not in the interests of public justice, nor indeed of the public purse, that weak, or borderline, cases should be prosecuted."

Therefore, the decision not to prosecute Aw Sian was definitely not a decision made in bad faith.

As to the rule of law, an independent prosecution decision is a vital safeguard to the Rule of Law. Not to prosecute when there is no reasonable prospect of securing conviction is a well-established prosecution policy. Respect for this prosecution policy is still my unshakeable conviction. Under Article 63 of the Basic Law, the Department of Justice of the HKSAR shall control criminal prosecutions, free from any interference. If in making a decision whether or not to prosecute, public opinion is the foremost consideration, then the Secretary for Justice might make a decision to prosecute simply to protect her own reputation, whether or not there is sufficient evidence. The injustice would be borne by the citizens.

I made the decision and am fully responsible for the consequences. The decision not to prosecute Aw Sian was made regardless of her position or status, but in compliance with Article 63 of the Basic Law and the well-established prosecution policy. The fundamental principle that there should not be any prosecution unless there is sufficient evidence should not be abandoned out of fear of criticism against me.

As Secretary for Justice, my role is to defend the independence and impartiality of criminal prosecutions. I will not be swayed by public comment to depart from the principles of our prosecution policy. In preserving the rule of law in Hong Kong, I shall adhere to this principle.

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Hong Kong Standard Case: Main points of the Secretary for Justice's statement

Misunderstanding over conspiracy charges

* The judge in the Hong Kong Standard case said he could understand an initial puzzlement in those unused to the criminal law as to how a court could decide that A conspired with B but that B did not conspire with A.

* The judge explained that this can be perfectly proper, because the same evidence may implicate A but not B.

* Because of this, it may also be perfectly proper for A to be charged with conspiring with B, but not vice versa.

Explaining prosecution decisions

* It is a well-established policy, based on fairness to suspects, that the reasons for prosecution decisions are not disclosed.

* This case is, however, exceptional and the reasons will be given.

* The case is exceptional since -

(1) allegations of bad faith made against the SJ must be answered;

(2) public comments have been made on the assumption that Ms Aw was a guilty party in the conspiracy, and lately the record of Ms Aw's interview with the ICAC has been improperly leaked to the press. In fairness to Ms Aw, the nature of the evidence against her should be clarified;

(3) it is necessary to restore confidence both locally and overseas in our legal system, which has been shaken by allegations of impropriety.

Adhering to prosecution policy

* No one must be subjected to a criminal trial unless there is clear evidence to justify that course

* A prosecution should only be brought if the evidence is such that there is a reasonable prospect of securing a conviction, and not merely because there is a case to answer (i.e. a 'prima facie' case).

* Even if there is such evidence, a prosecution should not be brought if this would be contrary to the public interest.

Reasons for not prosecuting: (a) the evidence

* The evidence against Ms Aw was nowhere near as substantial as it was against the other three suspects.

* No witness implicated Ms Aw.

* The evidence against Ms Aw consisted of a record of interview conducted by the ICAC on 4 June 1997.

* That record must be looked at in its entirety; it is not right to look just at a few questions and answers in isolation.

* Although Ms Aw said that she wished to raise the circulation figures of the two newspapers, she repeatedly emphasized that she had no intention to deceive the Audit Bureau of Circulation Ltd ('ABC').

* Ms Aw said that she was not aware of the illegal acts which her subordinates (as the judge was to find) initiated and, when informed of those acts, she told her subordinates to stop them.

* On the evidence available against Ms Aw, the SJ came to the conclusion that there was no reasonable prospect of securing a conviction.

Reasons for not prosecuting: (b) public interest factors

* Ms Aw was (and is) the Executive Chairman of Sing Tao Holdings Ltd, a publicly listed company; one of its subsidiaries is the Hong Kong Standard Newspaper Ltd.

* In order to survive, the company set about restructuring itself.

* Were Ms Aw to be prosecuted, there were real risks that -

(1) public confidence in the company would be undermined;

(2) the banks which had assisted the company would call in their loans, with potentially disastrous consequences; and

(3) the loss of confidence in the company would drive away yet more advertisers, and this could damage the company to the extent that it would have to make significant redundancies, and might even have triggered its collapse.

* If the company failed, its 1,400 employees in Hong Kong, and more than 500 employees abroad, might have faced redundancy.

* The SJ decided that, on public interest grounds, the possible consequences of the prosecution were not proportionate to the seriousness of the alleged offence. The failure of a long-established and well-respected media group at that time could have sent all the wrong signals to the international community, quite apart from the adverse impact it would have on the local media and on the morale of the community.

* The SJ therefore concluded that it was also not in the public interest to prosecute Ms Aw.

Review of decision not to prosecute

* After the decision not to prosecute was made, the SJ appreciated that the amount of evidence available, and the public interest factors, that she relied upon, could change. She therefore kept an open mind as to the possibility of prosecuting Ms Aw.

* No new evidence has emerged against Ms Aw. The ICAC is still pursuing inquiries which may or may not yield further evidence. The ICAC report will be considered once it is received.

* Under Article 63 of the Basic Law, the SJ is required to control prosecutions, free from interference. She has dutifully observed this requirement.

No other considerations

* Suspicion and allegations against SJ that she spared Ms Aw because of Ms Aw's social position and personal contacts are understandable but wrong.

* In considering the case against Ms Aw, SJ has not regarded her as someone special who would be put above the law. No other consideration was taken into account apart from those set out above.

* The rule of law means everyone (including those who are regarded as having special standing in the community) is equal before the law. There should be no double standards.

End/Thursday, February 4, 1999

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