Tycoon backs Paul Chan in flats row

PUBLISHED : Wednesday, 08 August, 2012, 12:00am
UPDATED : Wednesday, 15 August, 2012, 11:08pm


Tycoon Henry Cheng Kar-shun has become the first public figure to show support for development chief Paul Chan Mo-po, whose integrity is in question because of his involvement in leasing subdivided flats.

'I do think he is capable enough to take up the job as a minister,' Cheng, chairman of New World Development, said at a function yesterday. 'It is nitpicking and unhealthy to expose something done by an official more than 20 years ago. It is also unfavourable to Hong Kong governance.'

Cheng switched sides during the chief executive election race to back Leung Chun-ying over rival Henry Tang Ying-yen. He is also the boss of Leonie Ki Man-fung, an executive director of New World Development who served on Leung's campaign.

Political analysts said Cheng's support would not help Chan overcome the crisis unless he and his wife came clean as soon as possible.

Chan, whose ministerial responsibilities include unauthorised alterations to buildings, is facing mounting pressure to step down after he backtracked on Sunday on earlier statements that he had no knowledge about the illegal subdividing of flats owned by a company of which he is a former director and his wife the nominal controlling shareholder.

In a midnight statement, Chan admitted sub-leasing had been part of sales agreements for three blocks of flats bought by Harvest Charm Development when he and wife Frieda Hui Po-ming were directors. (Chan quit the company's board in 1997; Hui resigned in July.) This contradicted their earlier claim that neither knew about the rental arrangements.

Calls for his resignation have come from Legislative Council election candidates, including some from the pro-government camp. No minister has publicly supported him.

Leung has said he believes Chan will offer a clear explanation, and the convenor of the Executive Council, Lam Woon-kwong, urged him to give a full account.

'He is very isolated now,' said a political observer at City University, James Sung Lap-kung. 'Ministers have remained silent. Chan's closest ally, the chief executive, is on holiday. He has to deal with the crisis himself.'

Sung also said the war room of the new administration was not functioning because the post of information co-ordinator was vacant.

'Cheng is identified as a person from Leung's camp so his support for Chan would not be very helpful.'

His view was echoed by analyst Ivan Choy Chi-keung, who said Cheng's comment did not address public concerns. 'The public is criticising Chan for telling a lie. It's not an issue of nitpicking. The damage is done. I do think he should resign.'

Chan last month replaced Mak Chai-kwong, who resigned and was arrested by the Independent Commission Against Corruption for abuse of civil service rent subsidies.