Hong Kong anti-graft agency receives complaint about CY Leung's HK$50m deal
PUBLISHED : Thursday, 09 October, 2014, 2:58pm
UPDATED : Thursday, 09 October, 2014, 5:58pm
Andrea Chen [email protected]
Protesters outside ICAC headquarters on Thursday held up prop banknotes and called for an investigation into the deal. Photo: David Wong
A formal complaint has been lodged with Hong Kong’s anti-corruption agency regarding Chief Executive Leung Chun-ying’s £4 million (HK$50m) deal with a listed Australian engineering firm.
The complaint, lodged by representatives of the pro-democracy NeoDemocrat party, could lead to an Independent Commission Against Corruption (ICAC) investigation of the deal, revealed by an Australian newspaper on Wednesday.
Pan-democrat lawmakers have already announced plans to investigate Leung’s conduct in the Legislative Council.
A previously undisclosed contract dated December 2, 2011 – months before Leung became chief executive but a week after his declaration to run for the top job – sets out an agreement for engineering company UGL to pay him £4 million. The payments were made in two instalments, in 2012 and last year.
UGL sought to buy insolvent property services firm DTZ, of which Leung was a director and chairman of its Asia-Pacific operations. Leung announced his resignation from DTZ on November 24, 2011, and officially left the company on December 4.
Two days before his departure, he entered into the contract with UGL under which he would receive the money if he did not compete with UGL or DTZ. No other DTZ directors received such an offer.
The Chief Executive’s Office on Wednesday said the deal was a resignation agreement that set out possible scenarios if Leung lost the election.
“Mr Leung has not provided any service to UGL after signing the above agreement.”
But in the additional commitments stipulated in the contract, Leung said he would provide assistance to UGL “including but not limited to acting as a referee and adviser from time to time”.
In a statement, UGL defended both the deal and the decision not to declare it. It said the contract was a normal business arrangement, made after it acquired in December 2011 the subsidiaries of Leung's former employer, DTZ Holdings.
"Such agreements are common confidential commercial arrangements when a business is being acquired. The only difference here being Mr Leung went on nearly six months later to become the Chief Executive of Hong Kong," the Australian firm said.
NeoDemocrat community director Raymond Li said the contract could breach anti-bribery laws. “Leung did not declare his contract with UGL to the board members and other DTZ directors. There is a chance that he might have sold the other directors down the river,” Li said.
If Leung offered a service to the Australian company during his term and did not declare the payment he had received, it would constitute improper conduct, Li added. “There were conflicts of interest,” he said.
On Wednesday, a former ICAC investigator, Stephen Char Shik-ngor, questioned the deal with reference to the Prevention of Bribery Ordinance.
“Being a private company director, if you receive an advantage, then you must seek the permission of the principal – the board of directors. But if [Leung] has not disclosed this to the company, then it’s possible he may have breached the law.”
Lawmaker Kenneth Leung said the deal may have exposed impeachable misconduct. He also said there was a conflict of interest for Leung to be chief executive while playing an advisory role to a commercial company.
NeoDemocrats have demanded that Leung respond to the affair in person rather than issuing announcements via the Chief Executive’s Office.
“He must make public all documents in relation to his agreement with UGL, including the contract the Australian newspaper exposed,” said district councillor Frederick Leung.
An ICAC spokesman on Thursday said the agency would not comment on individual cases.
Even before the revelations about the payments emerged, many thousands of protesters who have camped out on the streets of Hong Kong for the last two weeks have called on the beleaguered chief executive to step down.
Leung faced an ICAC investigation in 2012 over allegations he gave false statements about illegal structures at his home, but it was eventually dropped.
Another investigation, into claims Leung offered a businessman a place on the government’s top advisory body in return for his support in the 2012 election, was dropped this year.
