HONG KONG'S newest legislator is running his private business out of an office heavily subsidised by his Legislative Council expenses, a Sunday Morning Post investigation has revealed. Regional Council functional constituency representative Alfred Tso Shiu-wai uses Legislative Council expenses - and contributions from a political party - to cover 99.5 per cent of the rent of his registered business headquarters in Tuen Mun. He has also spent more than $130,000 of taxpayers' money on renovating and re-equipping the office since being elected last August. Mr Tso denied this was a misuse of Legislative Council expenses, insisting he had been scaling down his business activities and was now using the office mainly for council work. ''I am quite ethical when compared to some of my [Legco] colleagues, though admittedly I may not be the best one,'' he said. ''I have never taken advantage of anyone and it is unjust to accuse me of over-charging the rent.'' The legislator said he had not charged his telephone, electricity, or mobile phone bills to Legco expenses, and now had only two staff managing his business activities in the 1,467-square-foot office. But the Sunday Morning Post found that phone calls to the Tuen Mun Trend Plaza office were still answered by staff saying it was the headquarters of Sunbeam, the name of two of Mr Tso's companies which run a local restaurant and kindergarten. Fellow legislators hit out at the misuse of public funds. ''We are using taxpayers' money. If members mix up their legislative office with their commercial business, it will cause confusion and look strange,'' independent legislator Emily Lau Wai-hing said. United Democrats legislator Cheung Man-kwong called on Mr Tso to explain why his business was run out of his legislative office. Legco House Committee deputy chairman Andrew Wong Wang-fat - who sits on the three-member panel established on Friday to monitor legislators' expense claims - criticised Mr Tso for ''not using the allowance properly''. The panel was set up after a controversy sparked off by a revelation that another legislator, Timothy Ha Wing-ho, had claimed $250,000 for computers and other electronic equipment. Mr Tso's Tuen Mun office was originally used solely for his private business. But after being elected to fill the seat vacated by convicted legislator Gilbert Leung Kam-ho last November, he turned half the office into the Northwest New Territories headquarters of the Liberal Democratic Federation, and also began using it for his Legco activities. LDF vice-chairman Raymond Wu Wai-yeung said the party paid $15,000 a month in rent to Mr Tso. The other half of the office is split between Mr Tso's legislative and private business activities. He claims $15,852.50 a month in rent on Legco expenses, all together covering 99.5 per cent of the total $31,705 monthly rent. The Sunbeam companies - owned by Mr Tso and his wife - also contribute $3,000 a month towards the rent. The legislator yesterday defended this rental arrangement, saying the guidelines for claiming expenses were unclear. Mr Tso said he did not claim anything from the Legislative Council for his $3,000 monthly mobile phone bill, and $1,000 monthly electricity and phone bills. The legislator has also made use of a special new office allowance to spend $130,000 on renovating the premises, between August 1993 and January 1994, including the installation of a $50,000 photocopying machine. He admitted the office equipment was sometimes used by his Sunbeam companies. Mr Tso's membership of Tuen Mun District Board and the Regional Council entitles him to a further $8,750 and $34,800 a month, without the need to produce any receipts for expenses. In addition to his $40,000 monthly legislator's salary, Mr Tso is able to claim $63,000 a month in Legco expenses, with receipts attached, and another $10,000 in travelling and entertainment expenses.