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SCMP Reporter

Antony Leung's version of events and the timing of the Budget Strategy Group discussions on the tax for new vehicles.

July 30, 2002: Preliminary meeting of Budget Strategy Group (BSG) considers items of revenue, including first registration tax for motor vehicles.

October 31: BSG discusses proposed changes to the vehicle tax regime, including increasing the rate for more expensive cars.

End of December: Mr Leung and his pregnant wife decide to buy a new saloon car, believing his Porsche coupe and Toyota jeep would not be suitable for a newborn baby.

January 4 and 5, 2003: The couple visits showrooms to look at Mercedes-Benz, BMW and Lexus cars.

January 11: The couple test drives a Lexus ES300.

January 14: BSG considers that the size of the increase in first registration tax for vehicles should be reviewed further.

January 18: Mr Leung and his wife test drive a Lexus LS430 at a Crown Motors showroom and like the model. Salesman tells them the company is offering a $50,000 discount on the listed price of $728,000.

January 20: Mr Leung signs an order form and pays a deposit of $80,000 by cheque.

January 23: The car is registered in Mr Leung's name.

January 25: It is delivered to Mr Leung's residence.

February 11: BSG agrees to adopt a more progressive tax system for private cars.

February 28: The revenue measures to be included in the Budget are settled.

March 5: Budget Day. First registration tax increase implemented.

March 8: Mr Leung is informed of a press inquiry about his purchase of the car. Tells his press secretary to respond by confirming the purchase. He telephones the car salesman to check on the price before and after the tax increase, and is informed the difference was roughly $50,000. Gives this information to press secretary.

March 9: Mr Leung reads a newspaper article about the purchase. He calls his administrative assistant to seek information about the decision dates on the proposed vehicle tax increase. He is told two papers on the tax were discussed by the BSG around October and February. Mr Leung calls the chief executive and tells him he had no intention to avoid tax.

Mr Leung speaks to the media and offers to donate $100,000 to charity, double what he believed to be the difference in tax. He later learns the difference was $190,000.

March 10: Mr Leung decides to increase his donation to charity to $380,000 and posts a cheque to the Community Chest. He expresses his regret over the matter to Tung Chee-hwa and offers to resign if necessary. Mr Tung speaks to the media. Mr Leung decides to formally tender his resignation. He then provides Mr Tung with a written report of events and later tells the media he accepts the chief executive's criticism.

March 11: He reviews the matter further and realises, for the first time, there had been a BSG meeting dealing with the vehicle tax on January 14, which had not been mentioned in his report. Calls chief executive to tell him.

March 15: Mr Leung receives a letter from Mr Tung saying the mistake warranted a formal criticism, but not resignation. Mr Leung withdraws his offer to resign. He makes a public apology.



From early meetings to a public apology . . . how events unfolded