Friends in high places

PUBLISHED : Thursday, 01 March, 2012, 12:00am
UPDATED : Thursday, 01 March, 2012, 12:00am


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Thanks to the escalating controversy surrounding Chief Executive Donald Tsang Yam-kuen's holiday arrangements, Chongqing property tycoon Cheung Chung-kiu is now a household name in Hong Kong.

Headlines about the luxury 'holiday treats' that Tsang enjoyed, courtesy of his tycoon friends - including Cheung - have put the latter in a distinctively uncomfortable limelight.

Assertions that Tsang might have been abusing the privileges of his office are set to dominate the last few months of his tenure as Hong Kong's most senior official and throw the spotlight on the government's apparently cosy relationship with the super-rich.

Tsang is set to answer questions at a special session of the Legislative Council today that are likely to cover a purported trip to the Thai island of Phuket on February 9 aboard a private jet owned by Cheung. While Tsang hasn't confirmed the jet belonged to Cheung, he said in a TVB interview that Cheung had been a friend for many years.

In a separate radio interview, he said he had reimbursed his friend for the ride on the HK$300 million private jet by paying him the price of economy-class tickets.

The normally press-shy Cheung wasn't immediately available to respond to questions for this article, according to an aide in Hong Kong.

People who know him say the 47-year-old speaks Cantonese with a slight Mandarin accent, despite his long connections with Hong Kong. He has built up a strong interest in the city's transportation infrastructure through the Hong Kong-listed Cross-Harbour, which he chairs. Cross-Harbour holds a 50 per cent stake in Western Harbour Tunnel and has 39.5 per cent of Tate's Cairn Tunnel as well as 70 per cent stakes each in the Hong Kong School of Motoring and the Autopass.

He is also chairman of three other listed companies: Yugang International, which is involved in trading, property investments, property management and treasury investment; Y. T. Realty, a property investor; and CC Land Holdings, which focuses on property development in his home town, Chongqing.

Y.T. Realty holds commercial properties - Century Square in Central and Prestige Tower in Tsim Sha Tsui - while CC Land has a land bank of 11 million square metres, of which 70 per cent is in Chongqing, with the remainder in Sichuan, Guizhou and Yunnan provinces.

Cheung has cut a high profile in investment circles in Hong Kong by taking so-called cornerstone positions in initial public offerings as well as buying property. He has even been dubbed Chongqing's Li Ka-shing. He is regularly seen at IPO presentations for investors with flamboyant tycoon Cheng Yu-tung, formerly chairman of New World Development and ranked by Forbes as Hong Kong's fourth-richest man, as well as Joseph Lau Luen-hung, chairman of Chinese Estates. In 2009, Cheung showed up at the IPO roadshow of Guangzhou-based Evergrande Real Estate Group with Cheng Yu-tung and Joseph Lau, ahead of Evergrande raising HK$5.56 billion on the Hong Kong stock market.

'The trio is no stranger to lunches where investment bankers present the listing candidates' background to draw support from tycoons,' said a banker involved in the deals.

According to company annual reports, Cheung is the son of Zhang Qing Xin, a former manager of a foreign trade enterprise who has sat on the boards of some Cheung companies. Cheung was born and educated in Chongqing, where he rose to become one of its richest people. In 1985, he set up a company named Chongqing Industrial, which trades predominantly on the mainland. By 2007, he was ranked as the richest man in Chongqing, with an estimated personal wealth of 12.5 billion yuan (HK$15.4 billion) by the Hurun Report, which tracks mainland wealth. Cheung, who came to Hong Kong as a young man, had property interests in Hong Kong that year valued at HK$3 billion.

'He likes the best properties on the Peak. Once he spots a target, he seldom lets rivals get it ahead of him,' said an insider who was involved in the sale of a property at 1 Gough Hill Road, on the Peak, in 2005. Cheung bought four houses at 1 Gough Hill Road from the Bank of China for HK$430 million in 2005 and sold them for HK$550 million in 2007.

But perhaps his most high-profile purchase came in 2007, when property sales records suggested he was behind the HK$430 million purchase of the historic King Yin Lei Mansion in the Mid-Levels, and planned to demolish it to make way for a luxury residential project.

The 71-year-old Chinese-style mansion was subsequently partly stripped, but after outrage from heritage activists, the government declared it a monument.

'He made his name known as a property tycoon and began his venture in Hong Kong,' another person said.

In 1994, Cheung managed to float his property and trading business, Yugang International, on the main board in Hong Kong. 'It was a critical turn and the listing status provided him with a shortcut to riches and fame,' said another banker who has pitched deals to Cheung.


The profit, in Hong Kong dollars, Cheung made on four properties on the Peak when he sold them in 2007