Hong Kong leader faces crisis over report of secret $6.4-million deal

Reporting from Hong Kong —  Hong Kong’s top government official, Leung Chun-ying, faced a new crisis Wednesday after an Australian newspaper reported that the embattled chief executive pocketed millions of dollars in secret fees from an engineering firm in exchange for supporting its interests in Asia.

Citing a secret contract, the Sydney Morning Herald reported that Leung accepted $6.4 million from Australian engineering firm UGL in relation to the company’s purchase of DTZ Holdings, a British property services firm. Leung was a director at DTZ and chairman of its Asia Pacific operations at the time.

Leung, who is currently dealing with mass demonstrations against his administration over calls for greater self-rule, did not register the earnings as a public official.

Leung’s office released a statement Wednesday defending the deal by explaining it was conducted before he became chief executive and that he was paid after he resigned from DTZ.

Those payments, made in two installments, came after he assumed the territory’s top government post, the newspaper said.

The Herald reported that DTZ was insolvent at the time of the deal, which left the company’s “other shareholders and creditors with nothing, wiping out investments and debts worth tens of millions of dollars.”

Representatives for DTZ and UGL could not be reached for comment.

Ma Ngok, an associate professor of government and politics at the Chinese University of Hong Kong, said the news would further erode confidence in Leung in the semiautonomous Chinese city of 7 million people.

“If it’s proven he’s done something wrong or illegal, that will of course ruin whatever credibility he has left,” Ma said.

Thousands of demonstrators participating in sit-ins that have shut down key parts of Hong Kong for nearly two weeks have been calling for Leung’s resignation.

The chief executive has been vilified by the protesters as a yes man for Beijing. The demonstrators are demanding that Beijing honor promises made to allow residents to vote for the next chief executive by 2017.

Beijing has indicated that it plans to screen candidates for the position instead.

Hong Kong officials and student leaders plan to begin formal talks Friday aimed at resolving the standoff.

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