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HK leader under pressure to explain Australian windfall

Leung Chun-ying, who is already facing down mass pro-democracy protests that have paralysed parts of the financial hub for more than a week, has yet to comment publicly on the affair - PHOTO: REUTERS

[HONG KONG] Hong Kong's embattled leader faces a "huge integrity problem", opposition politicians said Thursday as they called on him to explain why he kept large payments from an Australian company secret.

Leung Chun-ying, who is already facing down mass pro-democracy protests that have paralysed parts of the financial hub for more than a week, has yet to comment publicly on the affair.

But his office has said he was under no legal obligation to declare the earnings.

The revelation comes as Chinese president Xi Jinping launches a widespread anti-graft crackdown and austerity drive targeting party officials on the mainland which took control of the former British colony in 1997.

Australia's Fairfax Media reported Wednesday that Mr Leung received two payments totalling HK$50 million (US$6.5 million) from Australian engineering company UGL while in office.

The payments relate to a deal struck in December 2011 - months before Leung took office, but a week after he announced his candidacy - during UGL's purchase of insolvent property services firm DTZ, where Mr Leung was a director and chairman of its regional operations.

UGL said it would pay Mr Leung over the next two years not to compete with them, and the contract signed by him showed he agreed to act as an "adviser from time to time".

Opposition lawmakers on Thursday expressed their dismay that Mr Leung, who became the city's chief executive in July 2012, did not declare the payments to the Hong Kong public.

"It boils down to a huge integrity problem," pro-democracy lawmaker Claudia Mo told AFP. "Can you imagine Obama being a consultant of some company while being a political leader?" Another lawmaker, Cyd Ho urged Hong Kong's parliament to investigate the payments and called on Leung to explain himself publicly.

"He should have cut himself off all business affiliations. This time it's a very serious case. A statement cannot explain away all the queries from the public," she said.

Lawmaker Albert Ho also said Mr Leung's failure to declare the earnings undermined Hong Kongers' trust in their leader.

"He is the leader of our government. If he has such an integrity issue and he doesn't act honestly... how could he win trust from the public?" he told AFP.

All three lawmakers stopped short of calling for Mr Leung's impeachment. But Ms Mo added: "The word impeachment is now looming in the air".

A Democratic Party member said he would refer the case to the city's anti-corruption watchdog.

Protesters still camped out on the streets, also voiced anger over the deal.

"Ever since he took office people have taken a pretty dim view of him. Now these revelations consolidate people's belief he can't be trusted," protester Eric Yeung, 21, told AFP.

Leung's office defended the deal, saying it was "a confidential commercial arrangement and a standard business practice".

"Mr Leung has not provided any service to UGL after signing the above agreement," it said in a statement, adding "there is no requirement under our current systems of declaration for Mr Leung to declare the above".

The office said Mr Leung would only have advised UGL had he lost the election to be chief executive.

In a separate statement, UGL said the agreement was a standard confidential business deal and that the payments were staggered "to ensure... non-compete and non-poach obligations were met".

Mr Leung, a self-made property consultant before taking office, already faces a major crisis of governance.

He has had consistently low approval ratings and his nickname among pro-democracy protesters is "689", a reference to the number of votes he received from the 1,200 member strong, predominantly pro-Beijing committee that selected him.

Hong Kong's population, in contrast, is around seven million.

The revelation comes ahead of crunch talks set for Friday afternoon between student leaders and Mr Leung's deputy Carrie Lam over demands that the former British colony be granted full democracy.

However Occupy Central, one of the main protest networks, said Thursday afternoon a "new wave of civil disobedience" would be announced by all groups involved, raising doubts over whether the talks will go ahead.

Under plans unveiled by China in August, Hong Kongers will be able to vote for Mr Leung's successor in 2017, but only two to three vetted candidates will be allowed to stand. - AFP