Housing chief faces calls to quit as firm fails

PUBLISHED : Wednesday, 31 May, 2006, 12:00am
UPDATED : Wednesday, 31 May, 2006, 12:00am

Company owned by society chairman shuts, owing $2 million to sacked staff

The chairman of the Housing Society, which manages 32,000 subsidised rented flats, has closed one of his companies, laying off 120 employees and leaving up to $50 million worth of works - including government projects - unfinished.

More than 70 employees of the 14-year-old company David C. Lee Surveyors staged a protest at the Labour Department yesterday over their unpaid wages. The 120 staff are owed a total of $2 million.

David Lee Tsung-hei rejected calls for his resignation from the society, saying the closure of his firm was the result of a business dispute.

'This incident is purely a business dispute, which has nothing to do with the Housing Society,' Mr Lee said. 'I am the victim.'

But Housing Society member Ho Hei-wah said Mr Lee should step down for the sake of the society's image.

'Although Mr Lee may not be the culprit, he has failed to demonstrate strong leadership,' Mr Ho said. 'If he can't even manage a small company, how can he convince the public that he is capable of leading the Housing Society, which owns over $20 billion of assets?'

The Housing Society, established in 1948, is a non-profit statutory body that provides subsidised housing to people in need.

Lawmaker Albert Ho Chun-yan echoed the call, saying people in public office should be subject to tougher standards than other citizens.

Mr Ho said the incident indicated a lack of competence.

'He should quit,' the legislator said. 'Even members of buildings' owners' corporations have to quit their posts once they're bankrupted. So why should the chairman for the Housing Society be different?'

Legco housing panel member Fred Li Wah-ming also said Mr Lee should resign as the incident had affected his image as well as the lives of his employees.

The Housing Society would not comment on the matter.

The closure of the company came to light yesterday after a liquidation application was filed against the surveying firm on Monday.

The Housing Department confirmed it had contracted out two projects to Mr Lee's company and the Buildings Department also said the company has been granted some of its projects. They said the projects would be transferred to other surveying firms.

At a news conference yesterday, Mr Lee admitted the company - one of 12 in the David C. Lee Group - was in financial difficulty and had lost several million dollars a year.

But he said the company could have continued to operate had it not been for the dispute with a board member.

The company was unable to pay its workers because, as a result of the dispute, it was not able to obtain an overdraft from its bank, Mr Lee said. He was confident the outstanding wages would be paid.

James Law, former executive director of the company, claimed the staff had not been given proper notice as they were told of the closure only on Monday.

He said the liquidation application was 'unethical' because the company was financially healthy. 'It is simply an outcome of a dispute among board members.'