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Hong Kong party asks for probe of $6 million payment to Leung

Leung Chun-ying, Hong Kong’s 3rd Chief ExecutiveHong Kong’s Democratic Party said Thursday it has asked the independent anti-corruption agency to investigate the territory’s leader over a $6.4 million payment he collected from an Australian engineering company while in office.

Leung Chun-ying, already under pressure after ten days of massive pro-democracy demonstrations, kept secret the payments from UGL Limited.

Press reports this week alleged that UGL paid Leung in 2012 and 2013 for his help in acquiring DTZ Holdings, a property consultant.

DTZ employed Leung as its Asia Pacific director before he took office in July 2012 as Hong Kong’s Chief Executive.

The former British colony has been ruled by Beijing since 1997 as a special administrative region.

In August, China said Hong Kongers will have a direct vote in electing the next chief executive. But candidates will first have to be vetted by the China government.

On Thursday, pro-democracy leaders said Leung now faces a “huge integrity problem” over his failure to declare the outside money he took while holding office.

They vowed a new wave of civil disobedience until Leung resigns.

UGL denied seeking favors from Leung. It said the payment under a secret 2011 agreement was intended to ensure he didn’t compete with UGL or damage its business.

A spokesperson for Leung, Michael Yu, said: “Both the resignation from DTZ and conclusion of the agreement with UGL took place before Mr. Leung was elected as [Hong Kong’s] chief executive. There is no requirement under our current systems of declaration for Mr. Leung to declare the above.”

The Democratic Party — the third biggest party in Hong Kong and its oldest pro-democracy group — sent a letter to Hong Kong’s Independent Commission Against Corruption. Party chief executive Lam Cheuk-ting said the letter requested an investigation into a possible criminal offense under the prevention of bribery law.

UGL Limited trades on the Australia Stock Exchange under the symbol UGL.

It reported revenue of more than $4 billion in FY 2014. It operates in 52 countries with a workforce of more than 52,000 people.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

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1 Comment

  1. Just my opinion, someone please correct me if I am wrong but, while the agreement may have been concluded before he was elected, the contract that the agreement covers was not concluded until 2013 with the last payment. Is there a difference between an agreement and a contract?


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