Hong Kong chief executive ‘was paid £4m by Australian company

Hong Kong’s chief executive, Leung Chun-ying, secretly received millions of pounds in payments from an Australian company after he took office, according to media reports.

The engineering company UGL agreed to pay Leung £4m in relation to its acquisition of DTZ Holdings, an insolvent property services firm that had employed Leung as its Asia Pacific director before he took office, Melbourne-based The Age reported on Wednesday.

Leung announced his resignation from DTZ, confirmed his candidature for chief executive, and signed the agreement in quick succession in November and December 2011. He became Hong Kong chief executive in July 2012 – elected by a committee of 1,200 – and received the payments in two instalments over the following year-and-a-half.

While the report does not suggest that Leung committed any crimes by accepting the payments, it raises questions about his transparency during a period of intense political uncertainty. Pro-democracy protesters have been on Hong Kong’s streets for more than a week and Leung’s resignation is among their primary demands.

Leung’s office told the Age that the agreement “related to past, not future, service”, absolving Leung of the responsibility to disclose his gains.

“Both the resignation from DTZ and conclusion of the agreement with UGL took place before Mr Leung was elected as the chief executive,” the newspaper quoted Leung’s spokesman, Michael Yu, as saying. “There is no requirement under our current systems of declaration for Mr Leung to declare the above.”

Leung, however, also told the company that he would “provide such assistance in the promotion of the UGL Group and the DTZ group as UGL may reasonably require” and act as “a referee and adviser from time to time,” raising concerns about the scope of the arrangement.

The son of a police officer, Leung was born in Hong Kong in 1954, and spent much of his career as a rising star in the city’s real-estate sector. DTZ first partnered with Leung in 1999, according to the firm’s website.

UGL Group told John Garnaut – Asia Pacific editor at Fairfax Media and one of the story’s authors – in a Q&A that such confidential agreements were “standard business practice for such non-poach, non-compete regimes”.

“It was entered solely to ensure CY Leung did not move to a competitor or set up or promote any business in competition with DTZ, or poach any people from DTZ, and hence to ensure the business retained its value after UGL acquisition,” UGL said.