Franklin Lam Fan-keung

Contradictions over flats sale could force Lam to quit, says analyst

Contradictions in executive councillor's account of the circumstances surrounding flat sales has dented his credibility, says political analyst

PUBLISHED : Saturday, 03 November, 2012, 12:00am
UPDATED : Saturday, 03 November, 2012, 3:34am

Contradictory claims made by executive councillor Franklin Lam Fan-keung in defending himself against allegations of insider trading failed to clear up doubts about his conduct and could force him to step down, according to a political analyst.

The controversy arose earlier this week, when suspicions were raised that Lam had acted on advance knowledge of the government's introduction of a buyers' stamp duty on property sales.

Lam was reported to have sold two properties at Casa Bella, Mid Levels, about three weeks before Financial Secretary John Tsang Chun-wah announced last Friday that non-local buyers, including transactions in names of local companies, would be subject to a 15 per cent stamp duty.

It was suggested that Lam, who also held the properties in names of companies, profited from insider information obtained as an executive councillor to sell before the price dropped. The transactions have earned him about HK$10 million.

While both Tsang and chief executive Leung Chun-ying emphasised that non-official members of Executive Council had not been informed of the government's new measure until a few hours before the announcement, there were suspicions Lam could have known of the government's thinking over measures to cool the property market.

Initially, Lam said he did not know of the measure until he read the news as he had been out of town, adding that it was his wife who had handled transactions for the properties, which were put on the market in June.

Later, on radio, he said he had set an asking price of HK$9.88 million and the "excessive proceeds" - HK$70,000 eventually - would go to Centaline's agent Danny Leung. He emphasised that selling the flats was for family reasons and not for profits.

But the following day he contradicted his claim that Danny Leung would receive extra commission when he said the agent proposed donating the proceeds to an agency charity fund.

More questions were raised by the agent and Centaline.

While the agent said he did not make such proposal and that it had in fact been raised by Lam's wife, Centaline also released a statement saying the company would not accept donations from clients.

It added that it did not accept Lam's proposal to give the extra proceeds to the agent.

Lam insisted he was confused about the details because it was his wife who handled the transaction. Yet in another radio programme, he detailed his conversations with the agent.

Political analyst Ma Ngok said Lam's credibility was at risk. "Despite a lack of strong evidence of any wrong-doing, his contradictory claims have given an impression he was trying to hide something from the public," he said.