Mak Chai-kwong

Explanation No 4 for Chan and still questions remain

PUBLISHED : Saturday, 11 August, 2012, 12:00am
UPDATED : Wednesday, 15 August, 2012, 11:27pm


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Secretary for Development Paul Chan Mo-po says he will not step down amid the scandal involving subleased flats owned by a company linked to his wife.

But his fourth attempt in a week to clarify his involvement in the affair, which followed a call from Executive Council convenor Lam Woon-kwong to seize a 'last chance' to clear up the row, left questions unanswered and fuelled more criticism.

Chan, who only took up the job late last month after his predecessor Mak Chai-kwong was arrested by graft-busters, has seen his integrity rocked - especially after he released a statement on the stroke of midnight on Sunday admitting that he knew a Tai Kok Tsui flat bought by the company in 1994 had subleases in place at the time of purchase.

He was accused of backtracking on his earlier insistence that he knew nothing about the status of the Tai Kok Tsui flat and others owned by Harvest Charm Development. He resigned as a director of the company in 1997.

Candidates in next month's Legislative Council election have demanded his head. In an attempt to win back public confidence, Chan went before the television cameras again yesterday, insisting that he did not lie and apologising for his midnight statement, which drew claims he was deliberately holding back information to make life difficult for journalists.

Chan drew a distinction between flats divided into cubicles, with shared bathrooms and kitchens, and subdivided flats, with individual bathrooms and kitchens. He said the flat in Tai Kok Tsui fell into the former category, a fact he was aware of when the company bought it.

He said he did not know whether structural alterations to the flats had been authorised. And he refuted the accusation that he had released information selectively, saying: 'I just wanted to reply as early as possible.'

He added: 'I feel very regretful that I expressed myself unclearly ... I apologise wholeheartedly for my late reply [on Sunday] that caused inconvenience to the media.'

Asked if he would step down, he said: 'I have been telling the truth. I had sleepless nights and have been thinking thoroughly in the past two weeks. I understand the public expectation of me but my enthusiasm in serving the city remains unchanged. I will do my best to live up to public expectations.'

Chan said his wife, Frieda Hui Po-ming, who described herself as controlling shareholder in the company on a nominal basis only, had decided to sell her stake in all companies investing in old properties. He said the company had been controlled by a member of his wife's family, surnamed Au. Chan had previously refused to answer questions regarding the role of a director of the company, Au Cheung-shing, in the subleasing.

He also promised neither of them would invest in the local property market during Chan's tenure. Hui did not join her husband yesterday.

Critics said questions remained, including the extent of Hui's involvement in the business, and whether two other flats linked to the scandal have been subleased.

While surveyor Vincent Ho Kui-yip said cubicles were unofficially allowed by the government decades ago and had fewer safety risks than subdivided flats, former civil service minister Joseph Wong Wing-ping said Chan's explanation still failed to address public concerns. 'He has not even explained if rules were complied with,' Wong said.

Political scientist Ma Ngok said: 'It is a fact that Chan's wife operated a sublease business and could not shirk the legal liability. Morally, it is not a very proud thing to operate property transaction and sublease businesses anyway.'

Chief Executive Leung Chun-ying urged the public to allow Chan to focus on his job. He said the phenomenon of cubicles and subdivided flats had changed significantly with time.

Executive councillor Cheung Chi-kong said Chan's explanation was acceptable.