HK leader asked to explain UGL windfall

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Hong Kong’s embattled leader faces a “huge integrity problem”, opposition politicians say as they called on him to explain why he kept large payments from an Australian company secret.

Leung Chun-ying, who is already facing down mass pro-democracy protests that have paralysed parts of the financial hub for more than a week, has yet to comment publicly on the affair.

But his office has said he was under no legal obligation to declare the earnings.

The revelation comes as Chinese President Xi Jinping launches a widespread anti-graft crackdown and austerity drive targeting party officials on the mainland.

Australia’s Fairfax Media reported on Wednesday that Leung received two payments totalling $HK50 million ($A7.03 million) from Australian engineering company UGL while in office.

The payments relate to a deal struck in December 2011 – months before Leung took office, but a week after he announced his candidacy – during UGL’s purchase of insolvent property services firm DTZ, where Leung was a director and chairman of its regional operations.

UGL said it would pay Leung over the next two years not to compete with them, and the contract signed by him showed he agreed to act as an “adviser from time to time” for the Australian engineering firm, Fairfax reported.

Opposition MPs on Thursday expressed their dismay that Leung, who became the city’s chief executive in July 2012, did not declare the payments to the Hong Kong public.

“It boils down to a huge integrity problem,” pro-democracy MP Claudia Mo said. “Can you imagine Obama being a consultant of some company while being a political leader?”

Another MP, Cyd Ho, urged Hong Kong’s parliament to investigate the payments and called on Leung to explain himself publicly.

“He should have cut himself off all business affiliations. This time it’s a very serious case. A statement cannot explain away all the queries from the public,” she said.

Lawmaker Albert Ho also said Leung’s failure to declare the earnings undermined Hong Kongers’ trust in their leader.

All three MPs stopped short of calling for Leung’s impeachment, saying he should be given time to explain himself first. But Mo added: “The word impeachment is now looming in the air”.

In a statement to the media, Leung’s office defended the deal, saying it was “a confidential commercial arrangement and a standard business practice”.

“Mr Leung has not provided any service to UGL after signing the above agreement,” the statement said, adding “there is no requirement under our current systems of declaration for Mr Leung to declare the above”.

The office said Leung would only have advised UGL had he lost the election to be chief executive.

In a separate statement, UGL said the agreement was a standard confidential business deal and that the payments were staggered “to ensure … non-compete and non-poach obligations were met”.

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