NewsHong Kong

Ex-URA chief denies agreeing to Cheung Kong fee waiver

PUBLISHED : Thursday, 10 January, 2013, 12:00am
UPDATED : Thursday, 10 January, 2013, 4:34am
 

A former Urban Renewal Authority chairman says he has never heard any suggestion from Cheung Kong's No 2 man Victor Li Tzar-kuoi that the developer would be released from outstanding payments for The Center after paying HK$1.9 billion.

Lau Wah-sum was testifying in the Court of First Instance on the second day of a case brought by the authority to recover an estimated HK$23 million from Cheung Kong and its subsidiary, Agrila Limited.

Lau was asked by the URA's lawyers yesterday whether Li, Cheung Kong's deputy chairman, had said at a 2000 meeting that the developer would owe nothing to the authority after paying it guaranteed profit of HK$1.9 billion. "No, I have not heard of it," Lau said.

The alleged outstanding payment arose from a 1989 joint-venture deal under which Cheung Kong - the flagship business of Hong Kong's richest man Li Ka-shing - agreed to pay for the resumption of the land on which the Central skyscraper was built.

The URA's predecessor, the Land Development Corporation, made the agreement with Cheung Kong that Agrila would foot this bill, with the parent company as guarantor, the court earlier heard.

Yesterday, the court heard that the meeting in question, which took place in Cheung Kong's headquarters, was attended by Victor Li, Lau and Abraham Razack, who was then the LDC's chief executive.

Barrister Charles Manzoni, for Cheung Kong, suggested that Lau had wanted to clear all outstanding payments owed to the corporation in the run-up to its handover to the authority in 2001.

"Your objective as the chairman of [the LDC] was that the handover to theURA should be as clean as possible.

"It's inevitable that you wanted the LDC to be handed over … with as little outstanding as possible," he said.

Lau denied this. "The LDC wasn't involved in this project only. It was involved in quite a lot of projects," he said.

The URA is seeking HK$3.2 million - which it claimed was the amount not made from 2000 to 2002 - as well as a ruling that Cheung Kong must pay the resumption costs estimated at more than HK$20 million.

The hearing continues.

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