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Leung Chun-ying (CY Leung)
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Hubert Chak mounts a robust defence of the Link Reit’s policies. Photo: Felix Wong.

This isn’t social welfare ... Link Reit hits back at Hong Kong chief executive’s rent concerns

Executive also claims real estate investment trust holds no monopoly in city

A defiant member of senior ­management of the Link Reit ­struck back on Wednesday at Chief Executive Leung Chun-ying’s criticism of its renumeration packages and urged him not to confuse social responsibility with “social welfare” – a task that the property trust shrugged off as not its business.

Bosses insist there is no direct link between the rental profits the real estate investment trust makes and the incentive packages of ­senior management.

The Link fired back at Leung during a specially arranged press briefing on the same day the Post published an exclusive report on Leung challenging the reit to ­declare whether it was putting profit before people, as he queried whether its incentive package was designed purely to seek maximum rental income.

Taking a swipe at another comment by Leung that the government had no plans to acquire the Link, the trust’s bosses said they welcomed a government buy-back of its shares, and were open to a full purchase.

“There is a difference between social corporate responsibility and social welfare,” Link financial director Hubert Chak said, while citing how it spent hundreds of millions annually to fulfil the former. These included giving lower rents to social welfare organisations, building barrier-free facilities, arranging community events and reducing emissions.

But social responsibility did not mean giving subsidies to its tenants, Chak said, as it was a business entity. That job should fall on the government, he said.

The Link, which began operations in 2005, has been accused of adopting a business practice that pushes up rents and drives out small players.

In his interview with the Post, Leung said the government had never promised the Link a monopoly over the city’s grass-roots shopping mall business. But the financial director maintained it was not a monopoly, arguing: “Hong Kong is a free society. People can decide whether to buy it.”

He cited official statistics that the firm operated only 78 out of more than 200 wet markets, and the retail areas it controlled made up only 8 per cent of overall retail space in the city. “Eight per cent is not too much, is it?” Chak said.

The 8 per cent covers almost all public housing estate malls and wet markets that once belonged to the government.

On Leung’s accusation that the management’s incentive packages were designed to pursue maximum rental income, Chak said there was no direct linkage between the two, but “financial factors” were included in the calculation of their bonuses. He refused to say whether rental income was one factor.

Along with a post-Brexit rally that saw the Hang Seng Index climb 1.3 per cent on Wednesday, the trust’s share price jumped 2.96 per cent, closing at HK$53.95, fuelled partly by speculation a buyback could be in the offing.

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