Minister 'made grave error' in job fiasco

PUBLISHED : Thursday, 09 December, 2010, 12:00am
UPDATED : Thursday, 09 December, 2010, 12:00am

An investigative committee slammed minister Denise Yue Chung-yee and almost all other government officials who approved the controversial employment of former housing director Leung Chin-man at New World China Land (NWCL).

It criticised him for deliberately hiding facts in his application. But the two years of preparation and investigation did not conclude whether the job constituted a deferred benefit for earlier helping the government sell a housing estate to a New World sister firm at a bargain price.

The Legislative Council select committee's report, released yesterday, concludes 'it was inappropriate' for Leung to take the job at NWCL after having been housing chief. 'There is plainly conflict of interest for Mr Leung to take up employment with NWCL,' it said.

Yet the 12-member committee said the ultimate responsibility for the fiasco rested not with the developer nor even with Leung, but with Yue, the secretary for the civil service who was the final gatekeeper in vetting his application. It said she committed 'a grave error of judgment'.

The 444-page report was the result of an inquiry into NWCL's appointment of Leung in August 2008 as its deputy managing director and an executive director, a move that sparked public fury. He held the position only two weeks, stepping down hours after Chief Executive Donald Tsang Yam-kuen ordered a review of the Civil Service Bureau's decision.

Leung's appointment triggered wide criticism over possible conflicts of interests because, as the housing chief in 2004, he played a key role in the government's decision to sell Hunghom Peninsula, a never-occupied subsidised housing estate, for barely half the asking price to a consortium that included a sister company of NWCL.

As to the core question of whether Leung had gained a deferred benefit from NWCL for favouring its sister company in the Hunghom Peninsula case, the report did not make a direct comment. Instead it cited education minister Michael Suen Ming-yeung, who was the housing minister when Leung was the housing director, as saying that 'there were grounds for the public suspicion' on this.

'The select committee agrees with the view expressed by Michael Suen,' the report states.

The report levelled its heaviest criticism at the civil service secretary.

'Miss Yue, being a principal official under the accountability system, had not demonstrated political sensitivity in handling Mr Leung's application. She had failed to grasp public sentiments and understand public expectations and concerns.

'The select committee deeply regrets that as reflected in Mr Leung's case, Miss Yue had neither given precedence to the protection of the public interest nor upheld the approval criteria of the control regime, resulting in the government's credibility being damaged.'

Despite 'deeply regretting' the minister's performance, lawmakers did not suggest whether Yue should step down to shoulder political accountability.

Select committee chairwoman Li Fung-ying said it was out of the panel's scope to decide whether the minister should resign. 'Miss Yue is a politically accountable official. The committee has made its views very clear in the report. The public and the minister herself can judge whether she should resign after reading it.'

Several other serving and former senior officials were also lambasted. The committee 'deeply regretted' that Permanent Secretary for the Civil Service Andrew Wong Ho-yuen lacked a sense of responsibility and failed to provide reliable support for his superior, Yue, in the vetting process, the report said.

It said the performance of former permanent secretary for transport and housing Thomas Chan Chun-yuen 'is deeply to be regretted', as he failed to provide crucial information about the duties of Leung's former post to the Civil Service Bureau.

Only two officials, former permanent secretary for development Mak Chai-kwong, and chief executive officer (works) administration Wong Kwai-kuen, were praised for having discharged their responsibilities in the vetting process.

Leung, who testified five times before the committee, had his honesty questioned. The report accused him of deliberately concealing his involvement in the Hunghom Peninsula case during the hearings, and of avoiding disclosing the identities of NWCL chairman Henry Cheng Kar-shun and executive director Stewart Leung Chi-kin, who approached him with the job offers, by giving a vague answer on his application form that they were introduced by 'a family friend'.

Leung quickly hit back yesterday. In a statement titled 'Nothing can change the truth, not even politics!', issued hours after the release of the report, he called the document a 'report full of political motives'.

Denying that he had attempted to hide facts, Leung said he had detailed his involvement in the Hunghom Peninsula incident in various documents submitted to the committee. 'Unless I were an idiot, why would I try to conceal the information in the hearings,' he said.

He said he had seriously considered seeking a judicial review to challenge the report, but gave up on the idea. 'I find it impossible for me, as an individual with little force, to fight with this power group.'

Committee deputy chairman Lee Wing-tat said had no power to collect evidence to show whether any criminal offence had been committed.

Cheng yesterday reiterated that what his company had done was reasonable and legal. 'The government approved it [Leung's request to take the job]. The allegation that there has been transfer of benefits [between us and Leung Chin-man] is totally groundless.'

The report made 23 recommendations to improve the vetting of future applications.

Just a day before the release of the report, Stewart Leung announced he will retire next month. Cheng said the incidents were separate. 'It is totally not related. If it was a reason, he should have retired earlier [referring to the Legco inquiry into New World China Land's decision to hire Leung Chin-man]. He retires as he is getting old,' the tycoon said.

Asked why the report did not criticise the developer, Li said the purpose was to find facts regarding Leung Chin-man's employment.