Hong Kong chief executive candidate John Tsang had secret supporter who lent him HK$3m

Loan offered to former financial secretary through offshore company a day before he announced his election bid

PUBLISHED : Thursday, 27 April, 2017, 10:29pm
UPDATED : Thursday, 27 April, 2017, 11:10pm

Defeated chief executive candidate John Tsang Chun-wah had a secret supporter who loaned him HK$3 million from the start of his campaign before he received ­donations from others.

The person offered the loan to the former financial secretary through offshore company Prescill Holdings a day before Tsang announced his election bid in January, records released by the Registration and Electoral Office on Thursday revealed.

Tsang’s office declined to disclose the identity of the lender.

Hong Kong’s next leader Carrie Lam spent HK$2m in wages for election campaign team

“We needed the bridging loan to pay the rent in Hopewell Centre in the beginning,” Tsang’s aide Julian Law Wing-chung said on Thursday. “The person chose to lend it through a BVI company. The market rate was charged for interests.”

Tsang repaid the sum together with an interest of HK$10,600, charged from a 3 per cent per annum rate, to the company in early March.

Prescill Holdings, registered in the British Virgin Islands and inactive since 2002, reported its Hong Kong address as 12th floor, Harbour Centre in Wan Chai, according to the Offshore Leaks Database maintained by the International Consortium of Investigative Journalists.

Before 2002, the Hong Kong address was occupied by tycoon Marjorie Yang Mun-tak’s Esquel Enterprises, the annual return filed by Esquel a year earlier showed. The company was later moved one floor up.

The 12th floor is now occupied by Asia Satellite Telecommunications Company, owned by CITIC Group Corporation and Carlyle Asia Partners IV.

Law would not confirm whether Yang was the lender. Yang is among 204 people who each donated more than HK$1,000 to Tsang. She gave HK$250,000 under her name.

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Dubbed the “Cotton Princess” because of the size of her family business, Yang and Tsang have known each other since their undergraduate years at the Massachusetts Institute of Technology in the United States.

Ma Ngok, political scientist at the Chinese University, said it was not desirable for a candidate to borrow money from an offshore company, which essentially was anonymous and whose owner details were hidden from the public.

Bear in mind that the loan in question is bigger than any donations Tsang received afterwards
Ma Ngok, Chinese University

“The principle should be the same as donations. Anonymous sources are not allowed in order to avoid conflicts of interest,” Ma said. “Bear in mind that the loan in question is bigger than any donations Tsang received afterwards.”

Tsang was the popular underdog in the election and lost to Carrie Lam Cheng Yuet-ngor on March 26.

While bankrolling Tsang, Yang nominated Lam as a bloc with fellow deputies to the Chinese People’s Political Consultative Conference.

Tsang raised a total of HK$15.3 million for his campaign – HK$3.4 million less than Lam. He spent HK$10.2 million and donated the rest to charities.

Of his donations, HK$5.5 million comprised small sums worth less than HK$1,000, from 25,991 people.

As for the larger donors, Tsang enjoyed support from smaller businesses and a dozen professionals such as doctors and lawyers, in contrast with the all-star tycoon backing Lam received.

James Tien Pei-chun remained Tsang’s staunch supporter financially as well as spiritually, having given HK$650,000 through the private companies co-owned by him, his son and daughter.

Additional reporting by Ng Kang-chung