Leung Chin-man appointment controversy
Encyclopedia
The Leung Chin-man appointment controversy occurred in Hong Kong in August 2008, when the former Permanent Secretary for Housing, Planning and Lands, Leung Chin-man
was named Deputy Managing Director and Executive Director of New World China Land Ltd.
There was widespread suspicion among members of the public that job offer was a quid pro quo
for the favours he allegedly granted to its parent company, New World Development (NWD), in 2004. The Civil Service Bureau (CSB), which was responsible for vetting the appointments of former civil servants against potential conflicts of interest
, admitted to failing in their duty to consider all relevant factors.
project. The sale of the Hung Hom Peninsula HOS
housing estate
to NWD took place at less than half of the original asking price.
In November 2005, Leung was criticised in an Audit Commission
report, for having exercised his discretionary power before conferring with other government departments in 2001. Henderson Land Development
had been granted permission to exclude the public transport terminus from the gross floor area in its building plan for their Grand Promenade development, thus gaining additional revenues of HK$
3.2 billion as a result of the decision. The effect was to allow the addition of 10,700 square meters to the project.
Directorate officers wishing to take up outside work, paid or unpaid, full-time or part-time, during their final leave period before their formal departure from the Government and/or within a specified control period counting from the said departure, should apply for prior permission from the Secretary for the Civil Service (SCS) in accordance with detailed arrangements set out in CSB Circular No. 10/2005. According to procedures drawn up, civil servants of Leung's grade are subject to a 12-month 'sterilisation period' and required government approval to take up private sector posts within three years of leaving. Procedures laid down required that views from the relevant bureaux be taken into account.
, Denise Yue Chung-yee
, signed off on the approval for him to take up the job after it passed through the Advisory committee on post-service employment of civil servants, responsible for vetting the appointment.
The Transport and Housing Bureau, the Development Bureau and Administrative Officer Grade Management were asked for their views. On receiving these submissions, the CSB prepared a paper for the Advisory committee to facilitate their consideration.
The view taken by the CSB was that Leung would oversee only mainland business of his future employer, and that bearing in mind he had ceased to be Director of Building for six years, and had left the post of Permanent Secretary of Housing two years previously, his appointment was "unlikely to present problems of conflict of interest". In order to address any potential public perception issue, additional conditions were imposed in addition to the standard set of conditions. Accordingly, Leung's employment was to be confined to New World China Land, not represent his employer in dealings with the Government, would refrain from involvement in any Hong Kong related dealings of his direct employer, and not to disclose sensitive or classified information to his employer. On 4 July 2008, the committee submitted its recommendation to the SCS to approve Leung's appointment, and the SCS duly gave her approval on 8 July, on the terms stipulated.
, who chaired the vetting committee, was also himself criticised for conflict of interest for his close friendship with Leung. Political scientist Ma Ngok said "It is inevitable that the public will consider the advisory committee to be just a rubber stamp when the approval rate was 100%." Albert Cheng
commented: "[the] controversial appointment is a political time bomb, which threatens to seriously undermine the authority of the administration." Senior Non-Expatriate Officers Association chairman Poon Wai-ming argued that the controversy arose from a lack of strict enforcement of the procedures, and not their inadequacies. New World argued that they hired Leung in good faith after government clearance. Albert Chan
of the League of Social Democrats
and 50 members of the public filed a complaint with the Independent Commission Against Corruption
days after his appointment became public.
The Secretary for the Civil Service
came under fire for approving an appointment that gives the strong appearance of a conflict of interest. Chief Executive
Donald Tsang
asked the Secretary for the Civil Service to account for the approval process in a written report.
On 13 August 2008, Apple Daily
reported that the Hong Kong and Macao Affairs Office
had asked the Hong Kong government to solve the problem on or before 24 August, and that the best way forward would be for Leung to resign from NWD. However, The Standard reports that the Apple assertions "could not be substantiated". However, an unnamed top Beijing official in Hong Kong was quoted in the South China Morning Post as warning, without specifically identifying the subject he was referring to, that conflicts among interest groups may threaten Hong Kong's stability if not properly handled.
New World Development announced in the early hours of 16 August that Leung had resigned from his post, and would not be seeking compensation from the government, for its "inappropriate handling". Leung professed his "shock" to learn that officials had not considered his role in the Hung Hom Peninsula sale, and tendered his resignation. It was understood that the reassessment by the SCS would take place notwithstanding Leung's resignation.
editorial criticised the "glaring lack of political sense of some of our senior officials." Lee Wing-tat said it was clear from the episode that the government considered the public stupid. Albert Cheng pointed to the composition of the four-man Advisory committee, saying that issues would have been flagged had it included pan-democrats instead of just establishment figures.
There were only muted calls for Secretary's resignation. Commentators suggested that parties feared that demands for Yue's resignation would alienate civil servants in the forthcoming LegCo elections.
The next day, Donald Tsang confirmed that Denise Yue would not have to resign. He was satisfied with her apology and with the explanations offered by her. Tsang ordered a committee, of which Yue was to be a member, to be set up to perform a sweeping review of the system to process applications for former civil servants. This sparked fears among civil servants that their job opportunities after retirement would be curtailed.
In an op-ed
, Christopher Cheung states that Leung was quickly sentenced by the court of public opinion, and was "dangerously close to mob rule". The facts of the case rested on guidelines introduced in January 2006 which "elevate public opinion to the level of tyranny", and whose rigid entry and exit criteria from the civil service stand in the way of modernising the civil service.
Leung Chin-man
Leung Chin-man JP is a retired senior civil servant in the Government of Hong Kong the former Permanent Secretary for Housing, Planning and Lands.-Government career:...
was named Deputy Managing Director and Executive Director of New World China Land Ltd.
New World China Land
New World China Land Limited is the Mainland China property flagship of Hong Kong's New World Development, owned by Dr. Cheng Yu-tung's family.It is incorporated in the Cayman Islands with limited liability. It is engaged in property development projects in Mainland China, including property...
There was widespread suspicion among members of the public that job offer was a quid pro quo
Quid pro quo
Quid pro quo most often means a more-or-less equal exchange or substitution of goods or services. English speakers often use the term to mean "a favour for a favour" and the phrases with almost identical meaning include: "give and take", "tit for tat", "this for that", and "you scratch my back,...
for the favours he allegedly granted to its parent company, New World Development (NWD), in 2004. The Civil Service Bureau (CSB), which was responsible for vetting the appointments of former civil servants against potential conflicts of interest
Conflicts of Interest
"Conflicts of Interest" is an episode from the fourth season of the science fiction television series Babylon 5.-Arc significance:* Garibaldi begins to work for William Edgars. In the process Garibaldi is reintroduced to his ex-girlfriend, Lise, who is currently married to Edgars.* The "Voice of...
, admitted to failing in their duty to consider all relevant factors.
Background
In 2004, while Leung was Director of Housing, the government sold an unused Private Sector Participation SchemeHome Ownership Scheme
The Home Ownership Scheme is a subsidized-sale programme of public housing in Hong Kong managed by the Hong Kong Housing Authority...
project. The sale of the Hung Hom Peninsula HOS
Home Ownership Scheme
The Home Ownership Scheme is a subsidized-sale programme of public housing in Hong Kong managed by the Hong Kong Housing Authority...
housing estate
Public housing in Hong Kong
Public housing in Hong Kong is a set of mass housing programmes through which the Government of Hong Kong provides affordable housing for lower-income residents. It is a major component of housing in Hong Kong, with nearly half of the population now residing in some form of public housing...
to NWD took place at less than half of the original asking price.
In November 2005, Leung was criticised in an Audit Commission
Audit Commission (Hong Kong)
The Audit Commission is one of the oldest government departments of the Government of Hong Kong, known as Audit Department before July 1, 1997. The Director of Audit is appointed by the Chief Executive . The Director reports to the Chief Executive, not the Legislative Council...
report, for having exercised his discretionary power before conferring with other government departments in 2001. Henderson Land Development
Henderson Land Development
Henderson Land Development Co. Ltd. is a listed property company and a constituent of the Hang Seng Index. The company's principal activities are property development and investment, project management, construction, hotel operation, department store operation, finance, investment holding and...
had been granted permission to exclude the public transport terminus from the gross floor area in its building plan for their Grand Promenade development, thus gaining additional revenues of HK$
Hong Kong dollar
The Hong Kong dollar is the currency of the jurisdiction. It is the eighth most traded currency in the world. In English, it is normally abbreviated with the dollar sign $, or alternatively HK$ to distinguish it from other dollar-denominated currencies...
3.2 billion as a result of the decision. The effect was to allow the addition of 10,700 square meters to the project.
Procedural rules
Extract from LC PaperNo. CB(1)1786/03-04(03) "Policy governing the acceptance ofpost-retirement employment of civil servants" The basic principle to follow in considering applications is that there should be no impropriety in the proposed employment. In this regard, the Administration takes into account the following factors –
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Directorate officers wishing to take up outside work, paid or unpaid, full-time or part-time, during their final leave period before their formal departure from the Government and/or within a specified control period counting from the said departure, should apply for prior permission from the Secretary for the Civil Service (SCS) in accordance with detailed arrangements set out in CSB Circular No. 10/2005. According to procedures drawn up, civil servants of Leung's grade are subject to a 12-month 'sterilisation period' and required government approval to take up private sector posts within three years of leaving. Procedures laid down required that views from the relevant bureaux be taken into account.
Approval and conditions
The Secretary for the Civil ServiceSecretary for the Civil Service
The Secretary for the Civil Service is the head of the Civil Service Bureau in Hong Kong. Unlike other secretaries for bureaux, the Secretary for the Civil Service is filled by an administrative officer from the civil service, who may choose to return to the civil service when his term expires...
, Denise Yue Chung-yee
Denise Yue
Denise Yue Chung-yee GBS JP is a Hong Kong politician and Secretary for the Civil Service.-Education:Denise Yue graduated from the University of Hong Kong in 1974 and she attended Harvard University in 1988 obtaining an MPA during her civil service career....
, signed off on the approval for him to take up the job after it passed through the Advisory committee on post-service employment of civil servants, responsible for vetting the appointment.
The Transport and Housing Bureau, the Development Bureau and Administrative Officer Grade Management were asked for their views. On receiving these submissions, the CSB prepared a paper for the Advisory committee to facilitate their consideration.
The view taken by the CSB was that Leung would oversee only mainland business of his future employer, and that bearing in mind he had ceased to be Director of Building for six years, and had left the post of Permanent Secretary of Housing two years previously, his appointment was "unlikely to present problems of conflict of interest". In order to address any potential public perception issue, additional conditions were imposed in addition to the standard set of conditions. Accordingly, Leung's employment was to be confined to New World China Land, not represent his employer in dealings with the Government, would refrain from involvement in any Hong Kong related dealings of his direct employer, and not to disclose sensitive or classified information to his employer. On 4 July 2008, the committee submitted its recommendation to the SCS to approve Leung's appointment, and the SCS duly gave her approval on 8 July, on the terms stipulated.
Reaction
For many citizens, the incident was proof that there was collusion between the government and big business. Controversies surrounded not only the suspicions of Leung's own conflict of interest, but also of the insensitivity of the committee which recommended the approval for him to take up his new job with a HK$3.12 million pay packet, plus bonus, so soon after his retirement. Mr. Justice Pang Kin-keePang Kin-kee
Mr Justice Pang Kin-kee is Chairman of the Electoral Affairs Commission , Judge of the Court of First Instance of the High Court in Hong Kong.-Biography:...
, who chaired the vetting committee, was also himself criticised for conflict of interest for his close friendship with Leung. Political scientist Ma Ngok said "It is inevitable that the public will consider the advisory committee to be just a rubber stamp when the approval rate was 100%." Albert Cheng
Albert Cheng
Albert Cheng Jing-han GBS , widely known as "Tai-pan" is a Hong Kong businessman and politician. He is the chairman of Wave Media Limited which is currently preparing to open and operate a new radio station. He was also the host of Now TV's talk show, Sunday Taipan, on the Now Hong Kong Channel...
commented: "[the] controversial appointment is a political time bomb, which threatens to seriously undermine the authority of the administration." Senior Non-Expatriate Officers Association chairman Poon Wai-ming argued that the controversy arose from a lack of strict enforcement of the procedures, and not their inadequacies. New World argued that they hired Leung in good faith after government clearance. Albert Chan
Albert Chan
The Honourable Albert Wai-yip Chan , born 3 March 1955 in Hong Kong) is a member of the Legislative Council of Hong Kong representing the New Territories West constituency, except for the periods 1997-2000 and Jan-May 2011. Chan is also a member of the Tsuen Wan District Council...
of the League of Social Democrats
League of Social Democrats
The League of Social Democrats or LSD is a radical pro-democratic political party in Hong Kong. Its declared purpose is to "take a clear-cut stand to defend the interests of the grassroots"...
and 50 members of the public filed a complaint with the Independent Commission Against Corruption
Independent Commission Against Corruption (Hong Kong)
The Independent Commission Against Corruption of Hong Kong was established by Governor Murray MacLehose on 15 February 1974, when Hong Kong was under British rule. Its main aim was to clean up endemic corruption in the many departments of the Hong Kong Government through law enforcement,...
days after his appointment became public.
The Secretary for the Civil Service
Secretary for the Civil Service
The Secretary for the Civil Service is the head of the Civil Service Bureau in Hong Kong. Unlike other secretaries for bureaux, the Secretary for the Civil Service is filled by an administrative officer from the civil service, who may choose to return to the civil service when his term expires...
came under fire for approving an appointment that gives the strong appearance of a conflict of interest. Chief Executive
Chief Executive of Hong Kong
The Chief Executive of Hong Kong is the President of the Executive Council of Hong Kong and head of the Government of the Hong Kong Special Administrative Region. The position was created to replace the Governor of Hong Kong, who was the head of the Hong Kong government during British rule...
Donald Tsang
Donald Tsang
Sir Donald Tsang Yam-kuen, GBM, KBE is the current Chief Executive and President of the Executive Council of the Government of Hong Kong....
asked the Secretary for the Civil Service to account for the approval process in a written report.
On 13 August 2008, Apple Daily
Apple Daily
Apple Daily is a Hong-Kong-based tabloid-style newspaper founded in 1995 by Jimmy Lai Chee Ying and is published by its company, Next Media. A sister publication carrying the same name is published in Taiwan, Republic of China under a joint venture between Next Media and other Taiwanese companies...
reported that the Hong Kong and Macao Affairs Office
Hong Kong and Macao Affairs Office
Hong Kong and Macao Affairs Office is an administrative agency of the State Council of the People's Republic of China responsible for promoting cooperation and coordination of political, economic and cultural ties between mainland China and the special administrative regions of Hong Kong and Macao...
had asked the Hong Kong government to solve the problem on or before 24 August, and that the best way forward would be for Leung to resign from NWD. However, The Standard reports that the Apple assertions "could not be substantiated". However, an unnamed top Beijing official in Hong Kong was quoted in the South China Morning Post as warning, without specifically identifying the subject he was referring to, that conflicts among interest groups may threaten Hong Kong's stability if not properly handled.
SCS report
On 15 August, the Civil Service Bureau issued the report requested by Donald Tsang where they admitted that they had not considered Leung's role in the Hung Hom Peninsula affair when approving his application, and was thus not mentioned in the report to the Advisory Committee or the subsequent submission to the SCS. Although the Works branch and the Transport and Housing branch suggested that there may be a "public perception issue", neither believed that the appointment was "[likely to].. create a negative impact or embarrass the government" because his role was in mainland subsidiary. Donald Tsang asked the SCS to reassess the approval, and submit a report to him.New World Development announced in the early hours of 16 August that Leung had resigned from his post, and would not be seeking compensation from the government, for its "inappropriate handling". Leung professed his "shock" to learn that officials had not considered his role in the Hung Hom Peninsula sale, and tendered his resignation. It was understood that the reassessment by the SCS would take place notwithstanding Leung's resignation.
Political fallout
Yue lost credibility within and outside government circles as a result of the case, but said she hoped to stay in her position. Commentator Chris Yeung stated that Tsang's request for the bureaux to do their job again deals a body blow to the authority and image of Yue and the bureaux. A SCMPSouth China Morning Post
The South China Morning Post , together with its Sunday edition, the Sunday Morning Post, is an English-language Hong Kong newspaper, published by the SCMP Group with a circulation of 104,000....
editorial criticised the "glaring lack of political sense of some of our senior officials." Lee Wing-tat said it was clear from the episode that the government considered the public stupid. Albert Cheng pointed to the composition of the four-man Advisory committee, saying that issues would have been flagged had it included pan-democrats instead of just establishment figures.
There were only muted calls for Secretary's resignation. Commentators suggested that parties feared that demands for Yue's resignation would alienate civil servants in the forthcoming LegCo elections.
The next day, Donald Tsang confirmed that Denise Yue would not have to resign. He was satisfied with her apology and with the explanations offered by her. Tsang ordered a committee, of which Yue was to be a member, to be set up to perform a sweeping review of the system to process applications for former civil servants. This sparked fears among civil servants that their job opportunities after retirement would be curtailed.
In an op-ed
Op-ed
An op-ed, abbreviated from opposite the editorial page , is a newspaper article that expresses the opinions of a named writer who is usually unaffiliated with the newspaper's editorial board...
, Christopher Cheung states that Leung was quickly sentenced by the court of public opinion, and was "dangerously close to mob rule". The facts of the case rested on guidelines introduced in January 2006 which "elevate public opinion to the level of tyranny", and whose rigid entry and exit criteria from the civil service stand in the way of modernising the civil service.