One month has passed since the tragic fire at Wang Fuk Court. As investigations progress and more facts are disclosed, the incident has evolved from a single catastrophic event into a broader reflection of systemic governance and control failures. As someone who once took pride in Hong Kong’s governance standards, I believe it is necessary to offer a follow-up commentary through the lens of internal audit, risk management, and accountability.
A Risk Management Conclusion First
From a pure risk management standpoint, the most prudent strategy for investors is risk avoidance. Avoiding residential properties with a building age exceeding thirty years is often the most effective way to eliminate structural, fire safety, and governance risks. For owner-occupied properties, however, the reality is different. Under the current system, individual owners must collectively monitor and govern the owners’ corporation. Without active oversight by owners, the consequences are predictable and severe. Unnecessary expenses, weak controls, and safety risks ultimately fall on small property owners.
Owners’ Corporations and Their Consultants
Owners’ corporations and their consultants are not salaried professionals, yet they are entrusted with managing daily operations, major repair works, accounting matters, and procurement decisions involving significant financial resources. These responsibilities require professional judgment and carry inherent conflict-of-interest risks. There is no such thing as a free lunch. When owners’ corporation members fail to discharge their fiduciary duties with integrity, the financial and safety consequences are borne by residents.
The proxy voting mechanism is particularly problematic. Because proxy votes can directly influence election outcomes, the system easily becomes a breeding ground for corruption and manipulation unless transparency and verification are enforced.
As for owners’ corporation consultants, their role should remain strictly advisory. They should not influence the selection of committee members nor dictate repair strategies. With the growing adoption of AI, administrative support and general legal information can become more neutral and transparent, calling into question whether the traditional consultant model remains fit for purpose.
Property Management Companies as a Critical Risk Factor
Poor property management can be fatal. In the Wang Fuk Fire case, the management company reportedly allowed the fire alarm system to be switched off. This was not a simple oversight but a serious disregard for life safety. Even when owners are technically allowed to change property management companies, contractual and deed restrictions often limit real choice and drive costs upward. Changing management alone does not eliminate risk.
A recent case involving Choi Ming Court highlights this reality. A property management manager misappropriated HKD 60 million over ten years through forged documents, altered cheque amounts, and falsified signatures. From an Internal Control 101 perspective, it is legitimate to question whether the owners’ corporation, the property management company, and even external auditors truly fulfilled their responsibilities.
The Failure of Project Consultants
Project consultants are expected to monitor project progress, verify quality and cost, review variation orders, and assist in selecting main contractors. These safeguards exist to protect owners’ interests.
However, in the Wang Fuk Court case, such controls were rendered ineffective. Evidence disclosed by the Independent Commission Against Corruption indicates collusion between the main contractor and the project consultant, effectively neutralizing the intended oversight mechanism.
Government Departments and Systemic Breakdown
Residents sought assistance from multiple government departments. The Urban Renewal Authority was asked whether the major repair decision could be reconsidered, but the decision stood. The Labour Department conducted sixteen inspections after residents raised concerns about scaffolding and safety nets, repeatedly concluding that no issues were found. Ultimately, five workers lost their lives. Residents sought clarification from the Fire Services Department on fire safety arrangements but received no meaningful response. Public criticism of firefighting methods was met with collective rebuttals from firefighter unions rather than substantive engagement. Residents had also reported suspected corruption to the ICAC. Arrests of the main contractor and project consultant occurred, but only after the fire. Whether government bodies should bear responsibility is a question the public must continue to examine.
Addressing Claims of Resident Greed
Labeling affected residents as greedy reflects a lack of empathy and a misunderstanding of accountability. Private donations and Govrnment funding are not interchangeable concepts.
Even without considering loss of life, reasonable compensation logic is straightforward. Property value plus post-disaster housing costs represent a rational baseline. A compensation figure of HKD 3 million per household is not excessive by any professional assessment. In contrast, the combination of charitable donations and two years of rental assistance currently offered is insufficient. Describing this gap as greed is both unjust and irresponsible.
Conclusion
As ordinary citizens, our role does not end with making donations. We must continue to scrutinize developments, demand accountability, and question structural failures. Over one hundred lives were lost. Justice requires more than sympathy. It requires sustained attention and systemic reform.
The Wang Fuk fire should not fade into history as a tragic accident. It should stand as a catalyst for improving governance, strengthening internal controls, and reaffirming the value of accountability.
Reference
Wang Fuk Court Fire Video Compilation
https://www.youtube.com/watch?v=ce-w8__M7WI
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