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Hong Kong arrests 20 for alleged pension fund fraud

Since 2021, authorities have denied thousands of pension fund members who left Hong Kong for UK from withdrawing their money
People walk through the West Kowloon Cultural district overlooking Victoria Harbour in Hong Kong. Thousands have left the city since China imposed a National Security Law in 2020.

People walk through the West Kowloon Cultural district overlooking Victoria Harbour in Hong Kong. Thousands have left the city since China imposed a National Security Law in 2020. (Photo: Isaac Lawrence/AFP/Getty Images)

Published: October 17, 2023 07:51 AM GMT
Updated: October 17, 2023 07:59 AM GMT

Hong Kong’s anti-graft body arrested 20 people for allegedly attempting to withdraw money from their pension funds with false documents by claiming they were relocating to mainland China, says a report.

In a press statement, Hong Kong’s Independent Commission Against Corruption (ICAC) said 10 members of the Mandatory Pension Fund (MPF) and one insurance agent were among those arrested by the commission, Hong Kong Free Press (HKFP) reported on Oct. 16.   

The syndicate had “engaged in bribery and fraudulent means to assist Mandatory Provident Fund (MPF) scheme members to apply for early withdrawal of their MPF with false documents and statutory declarations,” said an unnamed commission spokesperson.

All those arrested were later released on bail, the spokesperson said.

The agency alleged that the insurance agent had accepted bribes for assisting several MPF scheme members to apply for early withdrawal of their funds and violated Section 9 of Hong Kong’s Prevention of Bribery Ordinance.

The members of the scheme can only withdraw their funds when they reach the age of 65, HKFP reported.

However, scheme members who can prove that they are permanently moving out of Hong Kong can withdraw their money early.

Allegedly, the agent used many false documents, including statutory declarations and proof of employment or residence in China, the agency spokesperson said.

“The insurance agent had allegedly accepted bribe payments ranging from several thousand dollars to tens of thousands of dollars from each applicant,” the spokesperson said.

Hong Kong has seen a mass emigration wave after Beijing imposed its repressive National Security Law in 2020 following anti-extradition bill protests in  2019.

The mass exodus of Hongkongers also escalated after the United Kingdom launched a British National Overseas (BNO) visa immigration route in July 2020.

BNO passport holders and their dependents can apply for permanent residency after living in the UK for five years under the scheme.

They can apply for British citizenship one year after completing the five-year permanent residency period.

In 2021, the Hong Kong authorities stopped accepting the BNO passport or its associated visa as proof of permanent relocation thereby denying thousands of MPF fund members who left Hong Kong for the UK from withdrawing their money.

The ICAC spokesperson pointed out that the agency will “not make further comments” on the case as the investigation and further process for legal action is ongoing on the matter.

“The ICAC will seek legal advice from the Department of Justice in deciding if prosecutions should be instigated,” the spokesperson said.

The spokesperson also warned the public that “bribery, using false instruments and false statutory declarations, etc. are serious crimes which they should avoid committing.”

According to government data, residents who permanently left Hong Kong withdrew around HK$1.79 billion (US$229 million) from their MPF accounts in the second quarter of 2023 — a 15.5 percent drop year on year.

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