Officials were unaware of Director of Immigration Laurence Leung Ming-yin's links to a businessman close to the mainland leadership until the connection was reported in the press, the Chief Secretary Anson Chan Fang On-sang admitted yesterday.
The South China Morning Post first reported the links.
Mrs Chan told the Legco select committee inquiring into Mr Leung's sudden departure that, as head of a disciplinary force, he should not have been involved in business in China.
It could have created an impression of a conflict of interest, she said.
Secretary for Civil Service Lam Woon-kwong said last week the four charges levelled against Mr Leung included his failure to declare his $100,000 investment in New Hong Kong China Advertisement Limited.
It was wound up after it failed to obtain a licence to do business in China.
The South China Morning Post disclosed the company's correct name was New China Hong Kong Advertising and a major shareholder was The New China Hong Kong Group, headed by Tsui Tsin-tong, a member of the Chinese People's Political Consultative Committee and the Preparatory Committee.
