Challenge to Legco's power

PUBLISHED : Wednesday, 19 August, 2009, 12:00am
UPDATED : Wednesday, 19 August, 2009, 12:00am

A leading property developer in the city is suing legislators, saying they do not have the power to make them testify about a controversial land deal. The legal battle erupted over New World Development's buying of an abandoned block of flats for HK$300 million less than the original government offer.

At first, New World Development Co chairman Henry Cheng Kar-shun and executive director Stewart Leung Chi-kin went along with being questioned by a special Legco committee. But then they filed a challenge against it, saying the committee had no right to call them as witnesses.

Hong Kong lawmakers set up a special committee in December to investigate Leung Chin-man, a former top housing official who joined New World after he retired. Legislators are investigating Mr Leung's role in the government's sale of an abandoned housing complex to a consortium that included a New World unit before he left office. The complex went for HK$864 million - about HK$300 million below the government's initial offer of HK$1.15 billion. Mr Leung said he had recommended to his boss, then-housing secretary Michael Suen Ming-yueng, that he take the lower offer in December 2003 because the housing market was bad in the wake of Sars.

Mr Leung quit New World weeks after he joined last August amid a public backlash.

The lawyer for the New World parties, Dinah Rose, said the Basic Law had been written in such a way as to limit the amount of power its committees could have.

She said Article 73 of the Basic Law made it clear that only the whole of the Legislative Council could exercise such powers. She said problems arose with Article 73 when committees began using coercive power.