Paul Chan

Land deal doubts hit development secretary's credibility

Development secretary insists neither he nor his wife have a stake in new town land but murky details of case keep questions coming

PUBLISHED : Wednesday, 24 July, 2013, 12:00am
UPDATED : Wednesday, 24 July, 2013, 5:45am

A lack of clarity over whether Secretary for Development Paul Chan Mo-po and his wife, Frieda Hui Po-ming, still hold an interest in 18,000 sq ft of farmland in Kwu Tung is raising fresh doubts about his credibility.

Uncertainty over the matter drove the media, a former ICAC investigator and a number of lawmakers to query his interests yesterday, on the second day of a row in which no clear answer has yet emerged.

My wife sold all her stock in early October last year, and that was a real transaction, not a trust arrangement like some people suspect it is. Absolutely not

Chan said on Monday that he and his wife had acquired 20,000 sq ft of land 19 years ago that is now in an area selected for part of the Kwu Tung North new town, and of which 2,000 sq ft had been resumed by the government.

He said neither he nor his wife had owned land since last year.

But Chan, who repeatedly said his wife had sold her shares in Statement Industries, the firm through which the land was bought, to her relatives, has yet to show any proof of the share sale.

The controversy grew when a farmer produced a rent receipt bearing Chan's signature on Monday, saying that Chan was the real owner who had rented him the land.

Land and company records show that Chan signed a provisional sale agreement with the firm in 1994 and remained on its board for seven years. His wife, holding 37.5 per cent of its shares through a non-Hong Kong company named Orient Express Holdings, was said to have sold all her shares of Statement Industries and quit as a director in early October last year.

But its two remaining shareholders - Fidelity Management and Excellent Assets - are not registered in Hong Kong and are managed by corporate directors registered in the British Virgin Islands. It is not clear who is behind Statement Industries and whether Chan and Hui still have influence over it.

"My wife sold all her stock in early October last year, and that was a real transaction, not a trust arrangement like some people suspect it is. Absolutely not," Chan said yesterday.

Responding to questions at an event in Tianjin yesterday, he did not disclose how much the shares had been sold for.

He also said through a spokeswoman that he could not reveal the price without the family's authorisation.

As key questions went unanswered, the Democratic Party, League of Social Democrats and People Power sought help from the Independent Commission Against Corruption and the Ombudsman, calling for formal investigations.

Democratic Party chief executive Lam Cheuk-ting, a former ICAC investigator, urged Chan to disclose all documents to prove he has no influence over the company, adding that the government should reveal Chan's declaration of interests.

League of Social Democrats chairman Leung Kwok-hung said Chan - who has already been caught up in various other scandals - should step down.

Democratic Alliance for the Betterment and Progress of Hong Kong lawmaker Ip Kwok-him said Chan should stay but steer clear of the redevelopment project.

"The scandal might make it even harder for Chan to rebuild his support among the public," Ip said.