Paul Chan

Pressure mounts on Paul Chan as lawmakers pass motion urging him to step down

Lawmakers pass motion urging development secretary to resign

PUBLISHED : Thursday, 25 July, 2013, 4:28pm
UPDATED : Friday, 26 July, 2013, 4:29pm

Lawmakers passed a motion on Friday morning urging Secretary for Development Paul Chan Mo-po to step down over the conflict-of-interest row relating to a new town project.

The non-binding motion, moved by People Power’s Albert Chan Wai-yip, was passed by the Legislative Council’s development panel with a vote of 11 to 7.

It managed to pass despite the absence of seven pro-government lawmakers.

Before the vote, the minister repeated the statements issued in the past few days - saying he and his wife had sold all land interests in the planned new towns at Kwu Tung North.

“I did not mean to squeeze out the information bit by bit. It took time for me to discuss with my in-laws, who also hold the company interests,” he said.

Chan has said he “definitely” would not resign.

On Thursday, the embattled politician made a last-ditch effort to extricate himself from the row.

Concrete proof of his wife's disposal of shares in a company owning the land - demanded by media and lawmakers since Monday - was finally released late on Thursday night after Chan insisted he would not quit.

Lawmakers passed a motion urging Secretary for Development Paul Chan Mo-po to step down over the conflict-of-interest row related to a new town project

But it was not clear whether this would stop a non-binding motion proposed by People Power being put to a meeting of the Legislative Council's development panel.

In an apparent coincidence the disclosure of his wife's sale came on the same day the government announced its annual update of declarations of interest by government officials. Several officials, perhaps prompted by the Paul Chan row, made further disclosures.

Chan's wife, Frieda Hui Po-ming, released a sales contract showing that her shares in Statement Industries Limited, the company through which the land in Kwu Tung was acquired, were sold to her brother, Hui Ka-lun, for HK$2.7 million. A stamped document showed the money was paid in three instalments.

In a statement, Hui said she would ask a lawyer to prove that neither Chan nor her two children owned any interest in Orient Express Holdings, a company that once held the land that is now slated to be part of Kwu Tung North new town, for which Chan's bureau is responsible.

Surveyor Charles Chan Chiu-kwok said the price was within market range as uncertainties over the new town project and the sale of only a portion of shares usually discounted the price.

According to some estimates, the owner could receive HK$17 million in compensation if it was resumed for public housing.

Chan admitted on Monday that his wife once owned the 18,000 sq ft lot, but said she had sold her shares in October when he realised it fell within the new town development.

Statement Industries announced on Wednesday that the land would be sold in an open tender. It also said Hui had already sold her 37.5 per cent share to her brother.

Lawmakers meanwhile argued over whether the motion seeking Chan's resignation should be put forward.

Unlike development panel chairman Lau Wong-fat, vice-chairman Tony Tse Wai-chuen - sitting in for Lau yesterday - agreed with People Power lawmakers that the motion requesting Chan to resign was relevant to discussion of the new town. But pro-government legislator Ann Chiang Lai-wan said accepting the motion would violate the council's rules

Chan said "definitely not" when pan-democrat Frederick Fung Kin-kee asked if he would resign. "My wife, my children and I no longer hold any beneficial interest in the land in the new town area," he said, adding that the sale of his wife's shares to her family was a real transaction.

"She signed a contract. It was duly stamped … she did receive the money according to my knowledge."

The row was also fuelled by a Development Bureau mistake in a transcript released on Monday in which Chan was quoted as saying that Orient Express was held by his wife and his wife's family. The bureau corrected it yesterday to "his wife and family" after Chan was accused of playing with words, referring to his son as his wife's family.

The ICAC is following up on complaints against Chan and could seek legal advice from the government. Secretary for Justice Rimsky Yuen Kwok-keung delegated authority in the matter to director of public prosecutions Kevin Zervos yesterday to avoid possible perception of bias.