Hong Kongs embattled chief executive, CY Leung, has pocketed millions in secret fees from a listed Australian company in return for supporting its Asian business ambitions, a Fairfax Media investigation can reveal. The arrangement is outlined in a secret contract dated December 2, 2011, before he was elected chief executive, in which Australian engineering company UGL agreed to pay the Beijing-backed politician £4 million (more than $A7 million). The payments relate to a deal in which UGL bought an insolvent 200-year old British property services firm he was associated with called DTZ Holdings, whose prospects depended on Mr Leungs network of managers and clients in Hong Kong and mainland China. In detailed answers to questions from Fairfax,, the Australian company UGL said the payment agreement was made not in hope of soliciting favours for the business but out of fear that he could destroy it. Mr Leung, who is currently battling unprecedented pro-democracy protests, strenuously defended his judgment to not declare the payments on his register of personal interests, when Fairfax brought them to his attention. The sale left Mr Leung with a secretive financial windfall – including an additional guarantee that UGL would pay to him an outstanding £1.5 million bonus owed by the insolvent firm – but left DTZs other shareholders and unsecured creditors with nothing, wiping out investments and debts worth tens of millions of dollars. Mr Leungs side deal equated to more than 5 per cent of the purchase price. A statement from his office said the payments related to past, not future, service and they were agreed at a time when he held no official position and before he was elected chief executive. Mr Leungs resignation took effect on December 4, 2011, the day that UGL acquired DTZ. The arrangement raises transparency questions for Mr Leung and also the Australian purchasing company, which is in the process of selling the DTZ business on to a US private equity firm, TPG. smh.au/business/world-business/hong-kong-chief-executive-cy-leung-faces-questions-over-secret-7m-payout-from-australian-firm-20141008-1134yv.html
Posted on: Thu, 09 Oct 2014 19:56:34 +0000
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