Tung Chee-hwa is to announce today that Donald Tsang Yam-kuen will take over as chief secretary for administration when Anson Chan Fang On-sang retires in April. He will also appoint Antony Leung Kam-chung as the new financial secretary to replace Mr Tsang, the South China Morning Post has learned.
Mr Leung, Asia-Pacific chairman of JP Morgan Chase, will be only the second person outside the civil service to hold the post; the other was Sir John Bremridge. Mr Leung will give up a $15 million a year pay package for $2.45 million in his new job, which is expected to be on contract terms. But there will be fringe benefits, such as the right to live in the official residence of the financial secretary near Ocean Park in Aberdeen.
Beijing and Hong Kong will make an announcement at the same time. The Basic Law gives Beijing the final say in the appointment of key SAR officials.
Mr Tsang disclosed to a group of students on Tuesday that Mr Tung had discussed the vacancy left by Mrs Chan several times. He said he had told the Chief Executive three times that the best option would be for him to remain in his present position, prompting speculation that he had turned down the offer.
But policy bureau chiefs are expected to be told the news this morning, while letters will be sent to executive councillors and lawmakers.
Tax experts say Mr Leung's biggest challenge is likely to be overhauling the revenue system. He may also face the controversial task of introducing new taxes.