The Chief Executive, Mr Ho Iat Seng, has directed Government departments to study closely the suggestions and issues raised in an investigation report by the Commission Against Corruption (CCAC) concerning Government loans to now defunct Viva Macau airline.

The CCAC has today issued a report on its investigation regarding the granting of loans between 2008 to 2009 by the Government’s Industrial and Commercial Development Fund to the airline, which went bankrupt in 2010.

As part of the administration reform effort, the Government would make an in-depth evaluation on functions, structures, and respective regulations and laws governing all public funds, with a view to ensure proper use of public resources.

According to the CCAC report, the relevant department was found that it had neither strictly required complete application documents from the applicant nor carefully scrutinised the applicant’s repayment capacity, during the vetting and approval process of Viva Macau’s loan application.

As a result, the Chief Executive has asked the Secretary for Economy and Finance to review the loan granting process by the Industrial and Commercial Development Fund, including making necessary optimisations in relation to loan-granting procedures, assessment of repayment ability and relevant supervision mechanisms.

Other enhancements ordered by the Chief Executive included: a robust loan guarantee mechanism and explicit requirements of assets with adequate repayment capacity when a loan application involving a large sum. These aimed to minimise risks to the Government when the fund receivers experiencing financial difficulties.

The Chief Executive also required an overall review on the laws and regulations applicable to loan-granting procedures of the Industrial and Commercial Development Fund, including approval criteria, supervision mechanism, and relevant penalties.

Following the Viva Macau loan case, the Chief Executive additionally required all Government funds involving functions of granting subsidies or approving loans to non-governmental groups, to analyse thoroughly the suggestions and issues mentioned in the CCAC report.

The CCAC report found that the civil servants involved in vetting and approving loans to the airline company had failed to fulfil their due responsibilities and obligations of supervision.

The Chief Executive stressed that all civil servants should ensure that the duty of impartiality and lawfulness when carrying their responsibilities. Meanwhile, the Government would step up its effort on the optimisation of official accountability system.

The Secretary for Economy and Finance attached great attention to the CCAC report and has instructed the Industrial and Commercial Development Fund to make necessary improvements in its loan-granting system.

The Industrial and Commercial Development Fund has been making a continued effort to optimise its existing subsidy and loan schemes that were available to local businesses. In 2018, the Fund has issued an internal guideline on the assessment of applications for a large amount of loan, detailing requirements of surety and repayment.

The Industrial and Commercial Development Fund planned to initiate law amending process in a near term, in order to strengthen protection from a legal perspective and to avoid similar incidents from happening in the future.

During the COVID-19 alert, the Government had introduced a number of measures aiming to relieve financial difficulties faced by various groups of people and businesses in the wake of the pandemic. Those measures, as a way to strengthen supervision of public funds, were created via specific laws that had strict requirements and supervision.